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Let’s start off with a refresher as to what data rights are and why they are important.
The SBIR/STTR Program allows small companies to maintain ownership of recorded technical information of a scientific or technical nature, including computer databases and software documentation, that is generated under an SBIR/STTR funding agreement (i.e. grants, contracts, cooperative agreements). The data must be first produced by the small business in performance of the funding agreement, be generally unknown, and not been made available to others by the contractor or to the Government. It does not include computer software or data incidental to the funding agreement’s administration (i.e. accounting, cost or pricing or management information). The government is granted a limited non-exclusive royalty-free worldwide license to use SBIR Form Fit and Function Data. In other words, the government cannot disclose this data outside the government. This protection applies to all phases of the SBIR/STTR Program. For small businesses, this data is the technological underpinning of the potential product (s) it hopes to sell. In disclosing this data, the government is basically inviting other entities (i.e. multi-national corporations) to use the data without any investment or effort and potentially diminish the rights and associated economic opportunities of the small business. To receive the protections accorded to SBIR/STTR Data, any SBIR/STTR Data that is delivered must be marked with the appropriate SBIR/STTR Data Rights legend or notice, in accordance with agency procedures.
Each SBIR/STTR funding agreement includes the DFAR clause 252.227-7018. Rights in noncommercial technical data and computer software – Small Business Innovation Research (SBIR) Program, which states that the protection period commences with the funding agreement award and ends five years after the period of performance ends for the award from which the data was generated. The protection period has been extended to 20 years per SBIR/STTR Directive effective May 2, 2019, page 104 8(h)(4); however the Defense Federal Acquisition Regulations (DFAR) have not been updated to reflect this change. We have a client who recently received a new SBIR Phase II contract that included DFAR 252.227-7018 as well as a Special Contract Requirement Section that detailed Data Rights Protection for five years. During contract negotiations upon our request on behalf of our client the contract was revised to include the 20 – year protection period.
Until the DFAR is updated to reflect the 20 – year protection period, make sure you request that your contracts include this revised period.