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Michael11

Contract closeout - patent rights royalties and inventions

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Hi all,

Interested in folks’ perspectives on reporting of royalties and patent rights during contract closeout.

For reporting of royalties, what is the government’s interest in this? Why are royalty payment in excess of $250 important?

Same thing for patent rights - what is the significance of reporting an invention as part of the closeout process? Would a contractor’s affirmative that an invention was made then supersede actual contract terms pertaining to the issue?

i am sort of confused as our contract is completely silent on both of these issues. The word patent or invention do not appear anywhere. The guidance on the closeout form says if any questions are answered in the affirmative, provide a copy of the information required by contract. There isn’t any?

Also, when settling  subcontractors we generally have them complete similar paperwork for their release of claims. Should a similar atteststion re: inventions, royalties, etc also be obtained? If one weren’t is there risk in the event a sub actually claimed an invention was made?

 

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45 minutes ago, Michael11 said:

For reporting of royalties, what is the government’s interest in this? Why are royalty payment in excess of $250 important?

Same thing for patent rights - what is the significance of reporting an invention as part of the closeout process? Would a contractor’s affirmative that an invention was made then supersede actual contract terms pertaining to the issue?

Have you read FAR 27.202 and FAR 27.302?

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It would help if you provided more details.

1. What Agency of the Government issued the contract?

2. Did you receive a pro forma closeout request from the Government. Is there an identifying form number associated with it?

3. Does the contract include any FAR 52.227-xx, DoD 252.227, or other agency .227 clauses? If so, which? If not, suggest you consider answering all  contract closeout patent, copyright or royalty questions with "N/A" unless these type clauses were included in the solicitation, in which case you should study it further as to your company's response to the solicitation,  and its obligation.

4. Was the contract competitively awarded, negotiated or sealed bid type?

The $250 is incorporated in FAR 52.227-6, which is a solicitation provision. There may not be much interest or offhand knowledge about why this amount has been unchanged since 1984. You can research that in the Federal Register for that time period. Some rationale of the Government's interest in royalty is included in FAR 52.227-6 and FAR 27.202-5  

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Thank you both for the feedback. Neil I will read those clauses with additional rationale for the governments interest in royalties.

This is for a non dod civilian agency.

We did receive the request from the CO but there is no identifying form number. It is tied directly to the task order.

There are no patent or royalty clauses whatsoever. None of the provisions Neil mentioned were in the rfp or in the subsequent contract as a clause.

The contract was awarded competitively under an idiq contract.

If these clauses are not included, is n/a an appropriate answer in the eyes of the government?

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Michael, I am in no position to speculate about what might be acceptable to the Government. If I was filling out this form, I would first call the CO and have a discussion about why patent or royalty clauses or questions are being asked in closeout of a task order (and not the entire contract.) It wouldn't surprise me if a pro forma closeout was sent which covers all contingencies, including those that do not apply to all contract/solicitation situations. I would explain that I could not locate any contract or binding solicitation provision regarding this topic and ask the CO to help by providing a specific contract or solicitation obligation. If none was provided, I would enter "N/A" with the above explanation.   

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Michael11, I am confused about your posts.  You said "The contract was awarded competitively under an idiq contract."  This indicates that you are talking about an order under an IDIQ contract and not an independent contract.  If that is the case, the order should be subject to the terms and conditions of the IDIQ contract.  Thus, you need to review the clauses in the IDIQ contract to see what is there.

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Thanks Neil that sounds like a reasonable course of action.

Retread - you are correct this was a competitive order under an idiq contract.

As it is a contract subject to commercial terms and conditions the only mention I found re: patents has to do with patent idemntity and does not contains clauses that refer to royalties over $200 or inventions.

it didn’t initially dawn on me that the govt could be requesting completion of a form that isn’t applicable to the terms of the contract 

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