27.302
Policy
FAR 27.302 sets the framework for balancing contractor and Government rights in inventions from federally funded R&D, emphasizing disclosure, commercialization, and public benefit while protecting Government interests.
Overview
FAR 27.302 establishes the Government’s policy and procedures regarding patent rights for inventions arising from federally funded research and development contracts. It outlines the balance between encouraging commercialization and public use of inventions, protecting the Government’s interests, and ensuring compliance with statutory and regulatory requirements. The section details when contractors may retain title to inventions, the Government’s rights to acquire title, licensing provisions, reporting obligations, and special considerations for small businesses and nonprofit organizations.
Key Rules
- Government Patent Policy
- Promotes use, commercialization, and public availability of inventions from federally funded R&D, while ensuring Government retains sufficient rights and minimizing administrative costs.
- Contractor Right to Elect Title
- Contractors generally may retain title to subject inventions after disclosure, except in specific circumstances (e.g., foreign contractors, national security, DOE nuclear programs).
- Government License
- The Government retains at least a nonexclusive, irrevocable, paid-up license to practice any subject invention worldwide, with potential for additional rights for international obligations.
- Government Right to Receive Title
- The Government may acquire title if the contractor fails to disclose, elect, or maintain patent rights, or no longer desires title.
- Utilization Reports
- Contractors must periodically report on the use of subject inventions, marking reports as confidential/proprietary.
- March-in Rights
- Agencies may require licensing to third parties if the contractor fails to commercialize or meet public needs, with due process for the contractor.
- Preference for U.S. Industry
- Exclusive U.S. licenses must require substantial U.S. manufacture, unless waived by the agency.
- Special Conditions for Nonprofits/Small Business
- Nonprofits must make reasonable efforts to license to small businesses; complaints may be investigated by the Secretary of Commerce.
- Minimum Rights to Contractor
- Contractors retain a revocable, nonexclusive license if the Government takes title, with certain transfer and revocation conditions.
- Confidentiality of Inventions
- Agencies may withhold invention information to protect patentability, but only for a reasonable time.
Responsibilities
- Contracting Officers: Ensure appropriate patent rights clauses are included, monitor compliance, approve license transfers, and protect confidential information.
- Contractors: Disclose inventions, elect title, file patent applications, submit utilization reports, comply with licensing and manufacturing requirements, and mark confidential reports.
- Agencies: Exercise march-in rights if necessary, investigate small business complaints, and coordinate confidentiality and licensing matters.
Practical Implications
- This section ensures federally funded inventions are used for public benefit while protecting both contractor and Government interests. Contractors must be diligent in disclosure, reporting, and compliance with licensing and manufacturing requirements. Failure to comply can result in loss of rights or Government intervention. Common pitfalls include late disclosures, inadequate reporting, or misunderstanding march-in and licensing obligations.