SmallGovCon: Data Rights and the Government Contractor: Restricted Computer Software

“After going over limited data rights in our last post on intellectual property in government contracts, it is only natural we discuss the similar but distinct concept of restricted computer software. As we noted in the limited data rights post, this only concerns contracts regulated by FAR, or, in other words, non-Department of Defense contracts. If you’re dealing with the Department of Defense, the Defense Acquisition Regulation Supplement (DFARS) applies. DFARS has similar provisions but also differs in meaningful ways. We’ll discuss DFARS at a later post.

The phrases ‘limited data rights’ and ‘restricted computer software’ are very similar in meaning. The difference is that the latter concerns computer software developed at private expense and that is a trade secret, is commercial or financial and confidential or privileged, or is copyrighted computer software (along with minor modifications to such software). FAR 52.227-14. If you recall our discussion on limited rights, with the exception of copyrighted computer software, there is no difference here between restricted computer software and limited data rights except that the former covers computer software specifically…”

“Like limited data rights, whether the software was first produced in performance of a contract or not matters. If the software was made in performance of a contract, the contractor must get the contracting officer’s permission before asserting any rights in the software. See FAR 27.404-3 and 52.227-14. The contractor must then affix an applicable copyright notice (almost always you’ll use 17 U.S.C. § 401 and the famous “©” symbol) and acknowledge the government’s sponsorship (including contract number). Failure to affix this notice can result in the government getting unlimited rights to the software, so do not forget to do it! Even then, the Government still is granted “a paid-up, nonexclusive, irrevocable, worldwide license in such copyrighted computer software to reproduce, prepare derivative works, and perform publicly and display publicly” per FAR 52.227-14. However, the government may not distribute the work to the public, which is a major limitation on the government’s rights in the software.

That all said, it should be noted with the above that the contracting officer is not required to grant such permission. FAR 27.404-3 provides that the contracting officer should generally grant permission, unless the data in question consists of an agency report, is intended primarily for internal use by the government, is data the agency itself distributes to the public, the ‘government determines that limitation on distribution of the data is in the national interest,’ or the “government determines that the data should be disseminated without restriction.” Those last two reasons obviously grant the government wide berth in determining what to do, and so whether a contractor’s copyright is recognized for data made during and for a specific contract is basically at the contracting officer’s discretion…” Read the full article here.

Source: Data Rights and the Government Contractor: Restricted Computer Software – By John Holtz, January 24, 2022. SmallGovCon.



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