SBIR Data Rights
Another Level of Sophistication
Value Not to be Lost
Tim Wittig
Principal
Technology Management Group
SAIC
202/841-0655 n Wittigsall@aol.com
Data Rights – A Part of the IP Package
• The IP Package
– Patents - 35 USC 202 Etc. and Bayh Dole Act
– Copyright – 17 USC 105 – Government Works Not Eligible
– Data Rights – Contract, SBIR, TSA and CRADA Rules
– Trade Secret – State Statute Driven
What is “Data” in Federal Contracting
• Data is Anything First Fixed During the Contract or CRADA is
Data Unless otherwise Defined
• An Invention is a Special Kind of Data
• Here not concerned with administrative or financial info
• Data Generally Belongs to the Contractor (Partner) With
Government Use Rights Attached
• What Are Government Use Rights
– Rights in Data Will Be Changed By Contract Language and Facts
– Data Rights Vary From Unlimited Gov. Rights to Restricted Rights
• Most restrictions are driven by inclusion of prior created data
– Only Gov. Paid Material, Some Private Input, All Private Input.
– CRADA and SBIR Data Rights Allow for a 5 Years Proprietary
Period where no “public disclosure” should be made
• Special Works Exception
Making Sense of Data Rights
• Data created during a Government Contract can be very
valuable.
– Beyond patent data, Technical Data could be the key to special
processes, material, and design yield a unique and valuable product
or service.
– Often, companies will avoid patenting to protect vital data, avoiding
costs long delays in legal proceedings, and litigation risks.
• However, this is a very complex area as the Government
cannot make up its mind. Special rules for
– Marking of SBIR and Proprietary material, Copyright
– Data from CRADA and Test Service Agreements
• So, what are these “Rights”?
PARSING RIGHTS – NONCOMMERCIAL COMPUTER
SOFTWARE (CS) AND TECHNICAL DATA (TD)
Rights Category
Unlimited Rights
Category Criteria
Permitted Uses
Internal to
Government
Development exclusively at
Government expense; also,
Form, Fit & Function;
Installation, Operation,
Maintenance & Training.
Permitted Uses
outside Government
Unlimited; no restrictions
Government Purpose
Rights
Development with mixed
funding
Unlimited; no
restrictions
Only for “Gov’t purpose”;
no commercial use
Limited Rights
(applies to TD only)
Development exclusively at
private expense
Unlimited; except may
not be used for
manufacture by others
Emergency
repair/overhaul;
evaluation by foreign gov’t
Restricted Rights
(applies to CS only)
Development exclusively at
private expense
Only one computer at a
time; minimum backup
copies; modification
forbidden
Emergency
repair/overhaul; certain
services and maintenance
Prior Government
Rights
Whenever Government has
previously acquired rights in
the deliverable TD/CS
Specifically
Negotiated License
Rights
Mutual agreement of the
parties – nonstandard
situations
Same as under the previous contract
As negotiated by the parties; however, must not be
less than limited rights in tech data, and must not be
5 in computer software
less than restricted rights
Now, what are the Regular SBIR Data Rules
• Data created under and SBIR phase I or II belongs to the
Small Business but the Gov. may use it royalty free.
• However, the Gov. may not disclose to the public or its
Contractors
– Not like usual Government Use Rights language
– But can disclose to support contractors who sign NDAs.
• Driven by statutes created in the 70 and 80s – the 2011
Defense Authorization Act expanded and strengthened SBIR
Data Rights
• Data rules created in the new implementing instructions
cannot be bargained away as the price of getting an SBIR
Award
SBIR Data Rights Rules - 2
• Gov. use of SBIR data is limited to use only by the Gov.
and its support contractor (not like usual data)
• SB may request that SBIR Data be withheld from the
public for 5 years (4 years for non-DoD agencies).
• SB can request continuation of withholding of SBIR Data
as long as SBIR company is involved in furtherance of
efforts of previous SBIR funded activity.
– Includes other Gov. contracts but not commercial efforts maybe
• Different from “Proprietary Rights” in data that is brought
to the contract effort by the SB. (later)
What businesses are eligible?
• Small at the time of the award
– 500 or less employees
• Different from the Usual Size Standard Rules
• SBA Affiliation Rules
– Ownership – at least 51 percent control by individuals who do not
own or control other companies such that the affiliations of these
companies yields an entity larger than the SBA size standard.
• SBIR Rules
– More than 50% owned by US Citizens or Resident Aliens
– Less than 49% owned by a hedge fund, venture capital operating
company or a private equity fund.
• What about a SBIC or MeSBIC?
“Proprietary” Data
• Here we begin another confusing arena where failure to act
will causes loss of ownership in intellectual property!
• What is “Proprietary Data”
– Generally – data created at private expense by the SB that is:
• Not available to the public without restriction
• Not previously disclosed to the government
• Not independently created by the government
• This is information the SBIR company brings to the effort.
• SB must:
– Mark it as “proprietary” on every page, providing name of owner
– Identify the data and describe basis for claim
• Once disclosed to the Gov., it is always disclosed!
There is a Ritual Here
• You must use specific words to mark SBIR data!
• Use
– DEFARS 252.227.7018 for Defense Agency contracts
– FAR 52.227.20 for non-defense agencies
• Use the exact wording
• Also use Williams Company Proprietary on every page
where proprietary info appears (paragraph markings)
• You can cure by sending in remedial marking chart but
any disclosure before receipt is IP lost.
So What???
• Data can be as valuable as a patent
– Know-how, processes, materials, etc.
• Unpatented properly marked data used to give you a
competitive edge in contract competition can subsequently be
withheld from disclosure for 5 years without the cost of
patenting. Likewise, SBIR data can also be withheld from
your competitors for 5 years
• Careful planning your IP protection program will allow you to
reduce costs while maintaining a competitive edge and
containing the ever increasing cost of patenting and the every
unpredictable outcome of litigation.
• Don’t give the competitive edge to your competitor.
Questions????
Tim Wittig
Principal
SAIC Technology Management Advisors
Wittigr@saic.com
Wittigsall@aol.com
202 841 0655