Intellectual Property In Government Contracts: Everything To Know
Creating intellectual property in government contracts can lead to many opportunities. Once you land a government contract, you'll possibly become successful.3 min read updated on February 01, 2023
Creating intellectual property in government contracts can lead to many very lucrative opportunities. Once you land a government contract, you have the chance to possibly become extremely successful and obtain additional contracts down the road. The government could also value your IP so much so that they license it from you.
Intellectual Property in Government Contracts: Overview
A federal government contract can be a significant source of money-making business for a private company, especially those engaging in new product and technology development.
The federal government is a big contributor to the creation of new technology and spends over $100 billion every year on contracts and grants with companies to create these processes and products.
Intellectual property is, in many cases, a company’s most important asset. It can take the form of trademarks, patents, and copyrights. It can also exist in a different, lesser-known form of proprietary data and trade secrets.
With regard to government contracts, this information can be incredibly valuable for the contractor because it can result in additional contracts to follow.
The right of exclusion, defined as the right to exclude anyone else, is dubbed as “one of the most essential sticks in the bundle of rights that are commonly characterized as property.”
“With respect to a trade secret, the right to exclude others is central to the very definition of the property interest. Once the data that constitute a trade secret are disclosed to others, or others are allowed to use those data, the holder of the trade secret has lost his property interest in the data.”
With regard to Department of Defense contracts, the rights of any technical information that is furnished to the government by a subcontractor are governed by the provisions of the contract, but also the Defense Federal Acquisition Regulations Supplement, which are referenced in the contracts.
For those companies that are developing technology, getting a government contract can present a plethora of opportunities within a business. It also can be challenging when mitigating the possible risk of losing IP rights at the same time.
IP rights are typically determined by the contract clauses that are imposed by regulation when they are created and used as part of a government contract.
In some situations, the government can impose intellectual property terms that are different for every contract. Despite this, the government contract terms can create a large range of different outcomes when it comes to ownership and the use of the intellectual property after it is delivered to the government.
Because of this, the contractors need to place priority on understanding, reviewing, and negotiation of the terms of IP before any contracts are signed.
Once the contract is executed, the contractor needs to make sure that at least one person from their management or legal team knows the IP rules and ensures there is strict compliance throughout the performance of the contract.
The government rights often rely on if the contract involves:
- A patent or a patentable subject
- Copyrighted material
- Computer software
- Technical data
A contractor is typically allowed to keep the ownership of the technology they had a hand in developing or that they delivered in the scope of the federal contract. In return, the government will generally receive a non-exclusive license to utilize that intellectual property.
That license will be dependent on the type of technology, the source of the funding, and the outcome of any negotiations among all parties involved. While discussing those rights, all parties are often looking to balance competition in the promotion of technical innovation while also protecting intellectual property rights while also providing the public with the opportunity to use the technology that was created using federal money.
A contract is won by competitive advantage. Your competitive advantage will help create your IP. The IP can relate to a certain design, more effective processes, a great benefits and wage package, or a skilled set of managers and employees.
In order to retain your competitive advantage, you need to ensure you hold on to the confidentiality of whatever you are producing while also innovating new IP.
If you need help with intellectual property in government contracts, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.