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I had a question presented to me about Intellectual Property and appropriate marking of data under a government contract. Specifically, the since the FAR/DFARS outlines in detail markings for limited, government purpose, and special license rights but is otherwise silent on unlimited rights markings. The work related to this drawing was properly segregated and identified as being produced solely with government funds for the first time under the government contract. The person asking the question assumed this meant government ownership of the drawing with a license to my Company. Protocol at my company is to mark our developed drawings with the “XYZ Company propriety” statement which may pose a conflict.

My quick response was no, we can’t include the “proprietary” statement on the drawings. The DFARS defines the acceptable markings. There are no “unlimited rights” marking requirements for IP submitted to the U.S. Government. Another Contracts Administrator more senior was also consulted however, and told them that we can and should include our proprietary marking. I believe we should only mark with a distribution statement as defined by the customer, an ITAR statement and a maybe copyright notice. Please advise as to whether or not I'm misinterpreting the DFARS/FAR on marking of IP.

In my response to the person posing the question I also offered the following :

  1. Although this drawing is developed under the government contract with government funds, unless specifically requested in the contract, ownership remains with our company but the government has unlimited rights. This gives the government (and our company) the right to use, disclose, reproduce, prepare derivative works, distribute copies to the public, publicly perform and display the material in any manner and for any purpose it desires (ITAR limitations would apply).
  2. With regards to My Company’s proprietary marking, the “XYZ proprietary" would be nonconforming as 252.227-7013(f) states what markings are permitted – “proprietary” not being one of them for documents delivered to the customer. We would still be able to use this marking on the document otherwise.
  3. There are no required markings in instances where the government has unlimited rights. The purpose of the markings are to clarify the government’s rights. Any unmarked deliverable will be presumed unlimited.
  4. Although Unlimited rights gives the government the right disclose and distribute, those rights don’t automatically imply that the government WILL disclose or distribute. In this case a Copyright may offer, and our company may want to consider some level of protection against those who illegally obtain the IP.
  5. DoD generally allows the contractor to own the copyright for original works created under a DoD contract (DFARS 227.7103-9, DFARS 252.227-7013-4). In such cases, the government obtains a nonexclusive, royalty-free license to use the copyrighted material in perpetuity. NOTE: This license allows any government agency (not just the original contracting agency) to use the copyrighted material.
  6. Copyright markings, are allowed in accordance with this same paragraph as prescribed under 17 U.S.C. 401 or 402. We will need to request authorization for copyright in accordance with 52.227-14.
  7. Articles are not required to be marked or registered to be considered copyrighted.
  8. Should we decide to copyright the IP, we would need to include wording similar to this below/or other wording approved by our Legal department:

    ©2014 XYZ Company Inc. This work, authored by XYZ Company Inc, was funded in whole or in part by the U.S. Government under U.S. Government contract #xxxxxx, and is, therefore, subject to the following license: The Government is granted for itself and others acting on its behalf a paid-up, nonexclusive, irrevocable worldwide license in this work to reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, by or on behalf of the Government. All other rights are reserved by the copyright owner.
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Guest Vern Edwards

About the drawings -- are they drawings that you plan to deliver to the Government or drawings that you plan to provide to other parties?

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The gentleman's question wasn't specific. I believe his plan is to establish an overall policy. I'm assuming we could include the proprietary statement when sent to suppliers/subcontractors but if submitting to the government under the contract, that information would not be included.

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Guest Vern Edwards

I don't understand what your company doesn't understand. The clauses seem clear about the rules regarding the marking of data that is deliverable to the government. Please restate your question more succinctly.

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The short and quick is that the company wanted to include a proprietary marking on a document that is an original work created under a DoD contract. I too believe the clauses are clear about the rules regarding the marking of data that is deliverable to the government. Even though we want to include the proprietary marking on the drawing to protect our company's rights, we can't do it (at least for the document being delivered to the government). But the same drawing could have the marking when being sent by my company to non USG entities. Is this a correct assumption?

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Guest Vern Edwards

I think that's right. What data rights clause is in the contract? Is there any question about the government's rights under the clause? What rights does the Government have?

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252.227-7013; 252.227-7014; & 252.227-7037

No question/dispute about rights. We asserted rights at the proposal stage. There are Govt Purpose, limited, and unlimited as well. We also are very careful to keep the government funded activity segregated from the internally funded activity.

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Guest Vern Edwards

It sounds to me like you know what the marking requirements and limitations are for data delivered to the government. I don't have anything to add other than to say what you already know, which is to comply with the terms of the contract.

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You consider the data proprietary, with the Government having unlimited rights. If there were a FOIA request that included the data, would you consider the data exempt from disclosure? If so, I expect you would want to include something in the data that puts the Government on notice of the requirement to notify you if the Government plans to disclose the data. If the Government objects to whatever marking you choose to protect your FOIA rights on the basis that it is a nonconforming marking, you can decide whether to assert that the marking does not limit the Government's rights and should remain or you can remove the marking (or you can decide in advance what you would do, and mark or not mark the data accordingly).

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Guest Vern Edwards

Don't put any markings on your data that are not permitted by the contract clause. If you want to do otherwise, consult a intellectual property attorney.

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After my previous post, I spoke with one of the tech data experts in my office. She indicated that because the Government's unlimited rights include the ability to disclose the data without restrictions on further disclosure, the data is no longer confidential and the contractor would not be able to prevent disclosure under FOIA. She also indicated that she would object to a "XYZ Proprietary" marking as nonconforming (and perhaps as inaccurate) and insist the contractor remove the marking and substitute the markings specified by the tech data clause.

Vern is correct, as always; consult an IP attorney before using any marking other than that specified by the contract.

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Thanks so much for all of your help. This is a really great resource and as we all know Vern is right more often than not.

@wvanpup I didn't even think about the FOIA ramifications. That adds an even more interesting twist.

We played around with the notion of including the Proprietary markings any way as the government has the option of ignoring the nonconforming marking (as 252.227-7013(h)(2))but decided against it as they also have the option of removing or correcting at our expense. Also no desire (at this point) to have two separate processes for what's being provided to the govt vs. what's being supplied to others...too confusing. Looks like we will happily comply ^_^

Also, In this particular situation, I don't believe there would be much value in involving the attorneys but I'm sure this issue will come up again with the company for a more critical part and I would assume that at that point we would want to get the attorneys involved or try to work out another arrangement with the government for rights.

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Guest Vern Edwards

@wvanpup I didn't even think about the FOIA ramifications. That adds an even more interesting twist.

In re: FOIA, disclosure of technical data is covered by Exception 3 pursuant to several laws, e.g., the Trade Secrets Act, Export Administration Act, the Patent Act, the Atomic Energy Act, the Homeland Security Act, and the Procurement Integrity Act. Moreover, 10 U.S.C. § 130 allows the Secretary of Defense to withhold certain technical data from public disclosure.

See Nash and Rawicz, Intellectual Property in Government Contracts (2008), Ch. 9, "Freedom of Information Act".

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  • 2 months later...

I have been reading the responses in this chain and have a question. Is the consensus that you should NOT mark as "XYZ Proprietary" data that would be Unlimited Rights data, such as OMIT or form, fit and function data? Since no marking is required for Unlimited Rights data, and markings not prescribed by the DFARS will be ignored, what is the harm in having a proprietary marking? My concern is with the disclosure by government of such data outside of the government (for example, to competitors). At least it would put those third parties on notice of the proprietary nature of this data.

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Guest Vern Edwards

natavas:

I don't know what clause applies in your case. If the clause at DFARS 252.227-7013, Rights in Technical Data -- Noncommercial Items (FEB 2014)", applies, then see paragraph (f), "Marking Requirements":

The Contractor, and its subcontractors or suppliers, may only assert restrictions on the Government's rights to use, modify, reproduce, release, perform, display, or disclose technical data to be delivered under this contract by marking the deliverable data subject to restriction. Except as provided in paragraph (f)(5) of this clause, only the following legends are authorized under this contract: the government purpose rights legend at paragraph (f)(2) of this clause; the limited rights legend at paragraph (f)(3) of this clause; or the special license rights legend at paragraph (f)(4) of this clause; and/or a notice of copyright as prescribed under 17 U.S.C. 401 or 402.

Emphasis added. Paragraph (f)(5) says:

(5) Pre-existing data markings. If the terms of a prior contract or license permitted the Contractor to restrict the Government's rights to use, modify, reproduce, release, perform, display, or disclose technical data deliverable under this contract, and those restrictions are still applicable, the Contractor may mark such data with the appropriate restrictive legend for which the data qualified under the prior contract or license. The marking procedures in paragraph (f)(1) of this clause shall be followed.

Nothing in the clause, in paragraph (f) or elsewhere, authorizes a marking such as "XYZ Proprietary." Moreover, if you give the data to the Government with unlimited rights, the Government can pass those rights on to anyone. See the definition of "unlimited rights" in the clause:

“Unlimited rights” means rights to use, modify, reproduce, perform, display, release, or disclose technical data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.

Emphasis added.

Bottom line: To comply with the clause, don't put anything on deliverable data that your agreement with the Government does not authorize you to put on the deliverable data. But if you still want to mark the data in a manner inconsistent with what the clause says, then consult an intellectual property attorney. (The clause I'm talking about is the current version, dated "FEB 2014". If the clause that applies to you is earlier, read it to see what it says about marking.)

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Vern, thank you for your response.

My concern is primarily with the apparent inconsistency of the required marking. DFARS 252. 227-7013 provides the four allowable markings for data. Three of them, GPR, LR and SLR describe the type of license government gets. Yet, data with unlimited rights, such as form, fit and function, do no get any kind of marking.

Let me use an example:

DFARS 252. 227-7013(f)(1) General marking instructions, provides that "[w]hen only portions of a page of printed material are subject to the asserted restrictions, such portions shall be identified by circling, underscoring, with a note, or other appropriate identifier."

The end product is a commercial item. One deliverable document contains data that has been developed solely at private expense (and would get Limited Rights marking), but contains some data that has been developed under this contract and was paid for by the government (would get an Unlimited Rights - no marking). Does that page of the document then include a "circling" with a note that particular data is Unlimited Rights, even though no marking requirement for Unlimited Rights data is prescribed by the DFARS?

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Guest Vern Edwards

What inconsistency?

If you send data to the government under a contract containing the clause, and if you do not put a restrictive legend on the data, then you are saying that the government has unlimited rights. That's because you must assert any restrictions you think you are authorized to assert under the terms of the clause. Why should you have to positively assert that the government has unlimited rights if you haven't said its rights are limited? Why should the government wonder what its rights are when only three kinds of restrictive markings are allowed on deliverable data and you haven't put any of them on the data you have delivered? No restrictive markings? No restrictions. No problem.

Further, see paragraph (e):

(e) Identification and delivery of data to be furnished with restrictions on use, release, or disclosure.

(1) This paragraph does not apply to restrictions based solely on copyright.

(2) Except as provided in paragraph (e)(3) of this clause, technical data that the Contractor asserts should be furnished to the Government with restrictions on use, release, or disclosure are identified in an attachment to this contract (the Attachment). The Contractor shall not deliver any data with restrictive markings unless the data are listed on the Attachment.

(3) In addition to the assertions made in the Attachment, other assertions may be identified after award when based on new information or inadvertent omissions unless the inadvertent omissions would have materially affected the source selection decision. Such identification and assertion shall be submitted to the Contracting Officer as soon as practicable prior to the scheduled date for delivery of the data, in the following format, and signed by an official authorized to contractually obligate the Contractor:

Identification and Assertion of Restrictions on the Government's Use, Release,

or Disclosure of Technical Data.

The Contractor asserts for itself, or the persons identified below, that the Government's rights to use, release, or disclose the following technical data should be restricted—

You don't identify data as restricted? Then, it's unrestricted. Simple.

So if you have unrestricted data within restricted data within unrestricted data, mark the restricted data and leave the rest unmarked. What's hard about that or hard to understand?

Makes perfect sense to me.

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