Post on 23-Jun-2020
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14. Intellectual Property,
Technical Data and Computer Software
INNOVATIONS IN ENGINEERING
Nadja Adilovic
Mary Luther
Krista Stone
The Basics of
Intellectual Property in
Government Contracts
Outline
Intellectual Property Overview
Intellectual Property Rights of the Federal Government
Best Practices to Protect Intellectual Property in
Government Contracting
Intellectual Property
Patents
Protect technological and scientific
innovation
Trade Secrets
Can protect all confidential business
information
Copyrights
Protect creative expressions of ideas
Trademarks
Protect your brand; prevent customer
confusion
Intellectual Property
Valuable intangible property created by
the human mind.
Provided for in the Constitution.
To promote the progress of science and
useful arts, by securing for limited times to
authors and inventors the exclusive right to
their respective writings and discoveries. Art. 1, sec. 8, cl. 8.
Patents
Patents - STRICTLY DEFINED legal requirements
Novel
Non-Obvious
Useful
Patentable Subject Matter
Machine
Process
Composition of matter
Article of manufacture
Improvements on any of the foregoing
Note: You DO NOT actually have to make or use an
invention before filing a patent application covering it
Patent Rights
A patent is a Government-granted right to stop others from making/using/selling the patented invention
Patent holder receives exclusivity in exchange for disclosing the invention to the public
Duration: 20 years from the date the non-provisional patent application is filed
Patent protection is territorial – only effective in the countries where a patent is actually on file
A patent does not give you the right to practice an invention, it only gives you the right to exclude others
Patents
Two required elements: (1) conception and (2) reduction
to practice
“Conception” is when you have thought of enough of
the invention that a person of ordinary skill in the art
could make it without undue experimentation
“Reduction to practice” is:
Actually making/using the invention; or
Filing a patent application (“constructive reduction to
practice”)
Patents
Timing is everything
When to File
Old Patent Law
First-to-Invent
Inventor with earliest date of invention = Date first conceived or reduced to practice
1-year Grace Period to file after first:
Sale
Public use
Publication
New Patent Law
First-Inventor-to-File
Inventor with earliest Filing Date of patent application
Absolute Novelty
Public disclosure prior to filing an application
Public use prior to filing an application
Sale or offer for sale prior to filing an application
“Offer for sale” can include including a detailed description of the
invention in a U.S. Government proposal
One-year grace period in US only – foreign rights gone
immediately – no grace period after March 18, 2013
Inventorship
Anyone who contributes materially to the conception of the invention is an inventor
Inventorship is determined by the claims of the patent A person is an inventor on the patent if s/he contributed at least
one element of at least one of the claims
Corollary: Inventorship can change during prosecution Additional claims might lead to additional inventors
Rejection of claims might lead to the elimination of inventors
Trade Secrets
• Is not generally known to the public
• Confers economic benefit on its holder if the benefit derives from the lack of public knowledge of the information
• Reasonable efforts to maintain its secrecy
A Trade Secret Can Be Almost Anything
Formulation, Internal Practice or Process, Design, Instrument, Customer Lists, Compilation of Information, Secret Formulas, Computer Code
ANYTHING THAT IS ADVANTAGEOUS TO KEEP SECRET
• NEVER EXPIRE, so long as good internal policies are followed and confidentiality is maintained
• Can protect an extremely wide range of information; anything that confers an economic benefit through confidentiality
• Implemented internally, but legal protection is dependent upon adherence to clear internal policies that are disseminated and monitored
Trade Secrets
Copyrights
Protect your creativity; you have copyright eligible material, and some will be worth registering.
Copyrights
Protect the creative expression of ideas as soon as that
idea is set down in tangible form
Copyrights
Copyrights are not only for works of art
Copyrights also protect:
Computer code
Web content
Sculptural works, architecture, board games, flower arrangements, fashion
Rights Granted are Exclusive
Reproduce the work
Prepare derivative works
Distribute copies of the work to the public
by sale or other transfer of ownership, or
by rental, lease, or lending
Perform the work publicly
Display the work publicly
Copyright Registration
• Requires payment of a fee, an application, a deposit of the material
• Legal rights and remedies extremely limited unless you REGISTER your work. • Presumption of validity - giving the infringer the legal burden of proving your copyright invalid.
• No registration. No law suit.
Copyright Registration
Registration can allow recovery of attorney fees
Demonstrates ownership, adds value in the eyes of
a potential investor, discourages infringement
Registration places potential infringers on NOTICE –
even if they NEVER SAW your content.
Trademarks
A trademark is a word, phrase, symbol or
design, or a combination thereof, that
identifies and distinguishes the source of
the goods of one party from those of
others.
Software
Three Bites of the Apple
Software can be protected via
Patents
Copyrights
Trade Secrets
Software and Patents
Patents can be obtained on software
The process claimed must be tied to a machine specifically
devised to carry out the process or must transform an article
A contentious area that elicits strong feelings
The law is in flux
Other methods of protecting software are available
Software Elements NOT Protected by Copyright
Functional Elements
Ex. – All medical patient record management software will have
to keep track of the same types of information
Commonly Used Software Elements
Ex. – “Would you like to save your file?” or common icons
Interfaces and File Formats Needed for Compatibility
Ex. – one can create a program using file formats that will
compatible with Microsoft Word
GUI, menu, command structure, overall user interface
Software Elements NOT Protected by Copyright
Internal structure of a program is considered and IDEA,
not a creative element
Organization of program modules or data structures, techniques
for managing memory usage
There is no infringement if there is no copying
Independent creation is a complete defense
Organization of program modules or data structures, techniques
for managing memory usage
Clean rooms
Software Elements Protected by Copyright
Source Code or Object Code
Verbatim copying is infringing
Companies can use clean room practices in order to insure
independent creation of similarly functioning code
Artistic and Creative elements of User Interface
Analysis would depend on similarity of functional, thematic,
audio, graphic elements of display, as with copyright analysis for
other media
Software can be registered without revealing all of the
source code
http://www.copyright.gov/circs/circ61.pdf
Software and Trade Secrets
Can protect software
Especially good if users will only license seats to
software and never have access to the source code
Subject to the same risks and obligations as any other
information kept as a trade secret
IP RIGHTS AND
GOVERNMENT CONTRACTING
IP Issues in Government Contracting
Differences between Government and
Commercial Contracts
FAR/DFARS Clauses, Policy
Patents
Data Rights
IP Issues in Subcontracting
Government v. Commercial Contracts
Commercial: UCC
Government: Pre-set terms – FAR, DFARS, etc.
FAR Part 27: Patents, Data, and Copyrights
Major Differences that Affect IP
IP RIGHTS OF THE
FEDERAL GOVERNMENT
WHO OWNS WHAT?
Intellectual Property Rights
Patents Copyrights Trade Secrets Trademarks
1. Make 2. Use 3. Sell 4. Import 35 U.S.C. 271
1. Reproduce 2. Prepare
derivative works (modify)
3. Distribute copies
4. Publicly perform
5. Publicly display
17 U.S.C. 106
1. Use 1. Use in connection with goods and services
“Bundles of Rights”
Licensing
An owner can sell or license some or all of these rights.
IP is a
Licensing
All Intellectual Property can be LICENSED. Each kind of intellectual property license has its own unique contractual considerations.
Types of Intellectual Property
Patents Copyrights Trade Secrets Trademarks
Patents Data Rights
Intellectual Property Rights in Government Contracting
Intellectual Property Rights in the US
IP RIGHTS OF THE
FEDERAL GOVERNMENT
PATENTS
Background/Policy
1980: Bayh Dole – first applied to small business and
non profit organizations
Before Bayh-Dole, USG had 28,000 patents; <5%
commercialized
Later extended to Large Businesses
FAR 52.227-11 Patent Rights – Ownership by the
Contractor
Background/Policy
Contractors generally have the right to elect title to any
“subject invention” – any invention of the contractor
made in the performance of work under a Government
contract . . . if they comply with necessary formalities
Contractors must comply with FAR formalities and patent
law formalities
Stanford v. Roche, 131 S. Ct. 2188 (2011) Patent rights
vest in the inventor – Bayh-Dole does not mean that
universities automatically get title to subject inventions
Government Rights in Patents
Background Inventions: Developed at private expense. Contractor retains ownership; not covered by the FAR
Subject Inventions: Rights of Federal Government determined by FAR or FAR Supplement
Contractors generally retain ownership of IP generated as result of government contract.
Government may elect to take title – FAR 52.227-13; DOE & NASA: Government gets title to large business inventions unless waiver
Government gets broad license to use IP - FAR 52.227-11 “the Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on its behalf, the subject invention throughout the world”
Strict Reporting Requirements to retain title
Patent Ownership
Government Rights in Patents
Government’s license in FAR 52.227-11 is nonnegotiable: “the
Government shall have a nonexclusive, nontransferable,
irrevocable, paid-up license to practice, or have practiced for or on
its behalf, the subject invention throughout the world”
Commercial terms are negotiable
Exclusivity
Transferability
Ability to sublicense
Term and termination
Payment – Royalties and License Fees
Difference Between Commercial License
Government Rights in Patents
Failure to disclose: Campbell Plastics Engineering &
Mfg., Inc. v. Brownlee, 389 F.3d 1243 (Fed. Cir. 2004)
Government took patent title for failure to report subject
invention for a gas mask. Campbell had previously
reported no subject inventions on interim reports to Army
Court rejected Campbell’s argument that although it did
not disclose on the specific DD 882 form, it disclosed all
technical aspects of the invention to the Army
STRICT Reporting Requirements: Cautionary Tale
Government Rights in Patents
Disclose Inventions Within 2 months after inventor discloses to Contractor personnel
responsible for patent matters. Provided detailed information
Interim Reports Required by DFARS
Elect to Retain Ownership Within 2 years of disclosure to the agency, but must be prior to 1
year statutory bar
DFARS 252.227-7038(c)(2): 8 months
File Patent Application Within 1 year of election OR statutory bar, whichever is earlier
If provisional, nonprovisional must be filed within 10 months
Extensions of Time Possible upon request
Contractor’s Obligations for Subject Inventions – FAR 52.227-11
Government Rights in Patents
FAR 27.302(e) Utilization reports. The Government has the right to require periodic reporting on how any subject invention is being used by the contractor or its licensees or assignees
Generally, Government satisfied with “a nonexclusive, nontransferable, irrevocable, paid-up license to practice . . . the subject invention . . .”
However, a third party license may be compelled: march-in rights
27.302(f) March-in rights. May be exercised only if: (i) contractor has not taken effective steps to achieve practical application of
the subject invention in the field of use
(ii) health or safety
(iii) to meet requirements for public use specified by federal regulations
(iv) 35 U.S.C. 204 has not been complied with (Preference for US Industry)
Commercializing the Subject Invention - March In Rights
Government Rights in Patents
March-In Rights have never been exercised
Determination in the Case of Fabrazyme, NIH, Nov. 3,
2010
3 patients suffering from Fabry disease (affects ability to
metabolize fat, leading to heart & kidney disease) petitioned NIH
to compel Genzyme to license others to make Fabrazyme, the
only treatment, which was reduced because of production delays
NIH denied petition essentially because no competitor would be
able to get the product to market before Genzyme corrected its
problems
Commercializing the Subject Invention - March In Rights
IP RIGHTS OF THE
FEDERAL GOVERNMENT
DATA RIGHTS
Government Rights in Data Technical Data and Computer Software
Technical Data: Recorded information of a scientific or technical nature (including computer databases and computer software documentation). This term does not include computer software . . . or data incidental to contract administration. Includes recorded information of a scientific or technical nature that is included in computer databases. Includes manufacturing processes; technical manuals; form, fit and function
data; raw data; technical reports, databases; computer software documentation, etc.
Computer Software: Computer programs, source 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. Includes source and object code, and material that would allow for
recreation or reproduction of the software.
Government Rights in Data Technical Data and Computer Software
FAR: Separately deals with ©s and trade secrets
DFARS: Trade secrets and ©s are part of a “hybrid”
data rights license
Data Rights •Reproduce •Modify (FAR:
“prepare derivative works”)
•Perform •Display •Distribute
•Use •Release •Disclose
Copyright •Reproduce •Prepare Derivative Works
•Perform •Display •Distribute
Trade Secret •Use
Government Rights in Data
Government acquires only those rights essential to its needs.
Contractor generally retains title, even if software/data developed entirely at Government expense.
Government obtains license rights. The extent of rights varies based on source of funds used to develop data.
Government’s rights in the information are distinct from the deliverables. FAR specifies the rights; contract specifies the deliverables.
Government Rights in Data
Items Developed with Government Funding
Government has Unlimited Rights. Can publish data on front page of Boston Globe.
Applies to: data first produced in performance of a contract, form, fit and function data delivered under contract; manuals or instruction material.
Proprietary Technical Data developed at Private Expense
Government has Limited Rights. Can reproduce and use, but not for purpose of manufacture and generally cannot disclose outside of Government.
Must be marked with Limited Rights Notice.
Proprietary Computer Software developed at Private Expense
Government has Restricted Rights. May use on the computer for which it was acquired or on a backup or replacement computer; archive and backup copies; modify, adapt or combine with other software; disclose to service support contractors.
Must be marked with Restricted Rights Notice.
Government Purpose Rights
Use in co-sponsored R&D; contractor makes substantial contributions of funds; contractor’s and government’s respective contributions not readily segregable.
Assures use of the data for agreed-to Governmental purposes only.
DFARS: Government Purpose Rights become Unlimited Rights after 5 years.
Commercial Off the Shelf Technologies
Government uses commercial license as long as consistent with law.
Depends on the Funding Source
Government Rights in Data
If you do not claim limited rights, the Government gets
unlimited rights
Underscores Data Rights’ connection to Trade Secrets – you
must take proper precautions to keep your secrets secret
Mark your data in accordance with the FAR – marking
“proprietary” is insufficient
– Pre-award: You must list deliverable data/software
– Post-award: Update assertions & mark the deliverables
Must keep records of your basis for assertion
Technical Data and Computer Software
Government Rights in Data and Software
Failure to mark: Night Vision Corp. v. United States, 68
Fed. Cl. 368 (2005).
Contractor delivered prototype goggles without restrictive
markings required by DFARS 252.227-7018
Government was allowed to disclose prototype hardware to
competitors because it did not have proper limited rights
markings
Cautionary Tale
Government Rights in Data
Technical Data to be Furnished with Restrictions*
Basis for Assertion** Asserted Rights Category*** Name of Person Asserting Restrictions****
(LIST) (LIST) (LIST) (LIST)
Some Best Practices
• Use the proper format. DoD: DFARS 252.227-7013
• Embed the correct legend digitally in software and technical data
that is transmitted electronically
• Have systems in place to ensure all limited rights technical data and
restricted rights software are marked with the exact legends
required, and are placed when and where required
IP Considerations in Subcontracting
General Rule: NO privity of contract between
government and subcontractor
Limited, express privity for patent matters
– Government and sub can transact IP business directly
Flowdown: Contractor must include the appropriate
patent rights clause, which is not necessarily the
prime contract clause
Must be flowed to subcontractors at any tier
FAR 52.227-11(k): “At all tiers, the patent rights clause must be
modified to identify the parties as follows: references to the
Government are not changed, and the subcontractor has all
rights and obligations of the Contractor in the clause.”