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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
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Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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We are a software consulting company. If we do a software tool

Customer Question

We are a software consulting company. If we do a software tool development cum consulting project with a government agency, and the government agency does not claim any Intellectual Property rights for that product, can we sell that software product to other government agencies and in commercial markets? Also, can you point me to a written text to testify your response.
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 6 years ago.

This is governed by FAR Subpart 27.4, Rights in Data and Copyright, which provides copyright guidance for the civilian agencies and NASA. Additionally, some agencies may have their own FAR Supplements that they follow.

Under the FAR general data rights clause (FAR 52.227-14), the government has unlimited rights in all data first produced in performance of or delivered under a contract, unless the contractor asserts a claim to copyright or the contract provides otherwise. Unless provided otherwise by an Agency FAR Supplement, a contractor may assert claim to copyright in scientific and technical articles based on or containing data first produced in the performance of a contract and published in academic, technical or professional journals, symposia proceedings, or the like. The express written permission of the Contracting Officer is required before the contractor may assert or enforce the copyright in all other works first produced in the performance of a contract. However, if a contract includes Alternate IV of the clause, the Contracting Officer's approval is not required to assert claim to copyright. Whenever the contractor asserts claim to copyright in works other than computer software, the Government, and others acting on its behalf, are granted a license to reproduce, prepare derivative works, distribute, perform and display the copyrighted work. For computer software the scope of the Government's license does not include the right to distribute to the public, and for "commercial software", the Government typically obtains no better license than would any other customer.

Thus, if you get retention of copyright rights you can sell to others commercially. If your contract does not take the rights from you, then you can sell it to anyone you like.

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Customer: replied 6 years ago.

Thanks for the answer.


Please give me some time. I need to go through the contract to make sure I understand things correctly. I hope you can understand.


I would reply by tomorrow.

Expert:  Law Educator, Esq. replied 6 years ago.
Thank you. You can follow up any time, even after you click accept.
Customer: replied 6 years ago.

We do not have anything about Intellectual Property (IP) rights or any alternate clause mentioned in the contract. So do we have to specifically request/assert IP rights/copyrights from the contracting officer to sell it to the other government agencies and in commerical markets? If yes, is a simple email or written letter consent from the contracting officer enough for securing the copyrights through assertion?


I would also like to bring to your notice US Code > TITLE 41 - PUBLIC CONTRACTS > CHAPTER 7 - OFFICE OF FEDERAL PROCUREMENT POLICY > § 403.12 in which the last item in the definition of Commercial item says that it should be developed at private expense. But here it is not. So does that mean even after getting the copyrights we would not be able to call it a commercial item? If no, then how will we sell it in commercial markets?


Lastly, lets say the contracting officer does not give us the copyrights. In that case, how can we sell that software product to other government agencies or in commercial markets.

Expert:  Law Educator, Esq. replied 6 years ago.
If you produced this item for them and they have paid for it, then without a clause in your contract to the contrary or something in writing granting you the copyright rights, the software is considered a work for hire and the rights go to the party who paid for the work. You would need a written agreement to have the rights to sell the software to others, either other government agencies or commercially.
Customer: replied 6 years ago.

ok. Could you help me with the rest of the two parts as below?


Now if we dont have the copyrights, thats means we have no way to sell the same software. Should we must re-write the same software code from scratch to sell to others. Can you confirm.


Also, If we get the copyrights, what does the last section of Commercial Items definition in § 403.12 imply?

Expert:  Law Educator, Esq. replied 6 years ago.
If you do not have the copyright rights you would have to rewrite the software with completely different code, since using the same code would be considered derivative use and would also violate copyright law.

The last line of the regulation implies that unless you retain or receive the copyright rights you could not sell it as it was created for the government.
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Customer: replied 6 years ago.
Thanks for the answer!
Expert:  Law Educator, Esq. replied 6 years ago.
Thank you.