On December 18, 2024 the DOD issued the final rule amending the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement changes to the data rights portions of the Small Business Innovation Research (“SBIR”) and Small Business Technology Transfer (“STTR”) Program Policy Directives. As part of DOD’s continuing efforts to encourage participation in collaborative opportunities for commercialization of technology developed under government funding, it adopts portions of a 2019 Small Business Administration directive and becomes effective January 17, 2025. Federal government contractors (and their subcontractors) that contract with the government for the delivery of data, including non-commercial technical data and computer software, should take a moment to understand the impact of these changes:
- The data rights provisions are now the same for both SBIR and STTR funding agreements,
- There is a single, non-extendable 20-year SBIR/STTR data protection period, revised from the previous renewable 5-year period, commencing on the date of award (instead of, as previously, from the date of the last deliverable or completion of the project),
- During the protection period, generally speaking, the government now has limited rights in its use of technical data, and restricted rights in use of computer software,
- Upon expiration of the protection period, and so long as the contractor has provided appropriate markings, the government acquires perpetual government purpose rights in data and computer software rather than the prior unlimited rights, and;
- Other noteworthy changes, such as updates to required markings, reporting, record-keeping, harmonization of terminology, and clarifications of rights given to contractors.
The expanded protection of SBIR/STTR data may indeed help DOD achieve its goal of providing more incentives for small businesses to participate, and the more limited scope of use granted to the government after the protection period may prove advantageous to contractors by providing more flexibility in commercializing the deliverables. To take advantage of the expanded protection under the rule, contractors will want to carefully review the applicable DFARS provisions contained in new solicitations and awards. The review of funding agreements should occur prior to execution to confirm that the awarding agency has included the intended provisions.
It is important to remember that the government and contractor may negotiate more specific, or different “special” license rights by mutual agreement, but only after contract award. Fluet’s Government Contracts team has experience in advising clients on the protection of valuable proprietary technology and can assist contractors in navigating the requirements of these programs.