We posted about this topic in 2017 (https://www.ebhoward.com/data-right-with-your-sbir/) and still receive many questions on the topic. Applicants want to know what happens to their data rights when they enter a contract with a federal agency for research and development. While winning an award is exciting, it can be stressful to be unsure what will become of your intellectual property once you partner with the government and receive funds for your research. Luckily, even when partnering with a federal agency the small business concern returns the majority of the data rights on their product, idea, or technology.
Limited use rights
Data rights for products developed under the terms of any SBIR program remain with the small business. The government will be granted limited rights to use such data for internal purposes and but is not authorized to release the data to outside sources without permission at least four years from the date of completion of the project. This allows the small business ample time to obtain the necessary patents and protection before the four year protection period ends.
At the end of the four-year period, the government retains a royalty-free license for use of data delivered under the contract, whether patented or not but all disclosure prohibitions end, and the government assumes no liability for unauthorized use of the data by third parties.
What is not protected?
Some data is not protected at all such as the project summary on the proposal cover sheet. Similarly, the company name, award amount, and contract start and end dates are public records. 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.
What is always protected?
Any software, trade secrets, and other technical knowledge originally developed prior to the project and without government support remain the intellectual property of the small business. To retain these data rights, the small business must identify such property in the proposal. If you have any specific questions ask the point of contact for the specific proposal. For definitive guidance on a specific issue, it is best to reach out to an intellectual property lawyer.
We work with high-growth startups and organizations that support the startup and innovation ecosystem. We build highly specific non-dilutive funding menus, provide proposal preparation services, and measure outcomes of funding through evaluation. Schedule a consult call with us HERE.