Generally speaking, Data Rights, including software, developed under the terms of any SBIR program remain with the small business, except that the Government shall have the limited right to use such data for internal purposes and shall not release such data outside the Government without permission for a period of fours years from the date of completion of the project which generated the data. As of now, at the conclusion of the four-year period, the Government retains a royalty-free license for Government use of any technical data delivered under the contract, whether patented or not; is relieved of all disclosure prohibitions; and assumes no liability for unauthorized use of the data by third parties. Some data of a general nature, such as the project summary on the proposal cover sheet, must be furnished without restriction (i.e., with unlimited rights) and may be used by the Government for any purpose. However, specific data to be acquired with unlimited rights will be identified in any draft contract and is negotiable at the time of the award. Trade secrets and other commercial and/or financial information that is considered confidential and/or privileged and was first developed at private expense will not normally be acquired. If such data must be acquired, it will be with “limited rights” or “restricted rights.” Such rights do not include the right to use the data for manufacturing or re-procurement purposes.
In plain English, this means that any software, trade secrets, and other technical know-how developed under that project will be protected by parties outside the Government for a period of four years dating from the end of the contract. This is to allow the small businesses a reasonable amount of time to commercialize the technology and/or seek patent protection. The Government is on your side when it comes to Data Rights. It has a vested interest in seeing technology it funded successfully commercialized. However, the Government is not infinitely patient; the clock is running. After four years, the Government is absolved of the responsibility to protect the data but retains a royalty-free license to it nonetheless.
On the other hand, you are entitled to retain full ownership of any software, trade secrets, and other technical know-how originally developed prior to the project and without Government support (i.e., at the private expense). However, it is your responsibility to identify at the time of proposal any data that will be used in the performance of the contract for which you claim ownership. Bear in mind, though; the Government is fairly generous in the technical data rights granted to small businesses. The main thing is to ask questions and think ahead. For definitive guidance on a specific issue, consult your intellectual property lawyer, as well as the funding agency.
We help high-growth startups find and apply for non-dilutive funding. Schedule a consult call with us HERE.