Licensing Software to the Government
Under the Revised [1995]
FAR/DFAR* Regulations

By
Joseph Valof, Esq.
OnLine Counselsm

1 Wessonville Village Way
Westboro, MA 01581
Phone/Fax: 508-366-8825
E-Fax: 208-978-7365
E-Mail: igcatty@earthlink.net


FAR'S [FEDERAL ACQUISTION REGULATIONS] apply to Civilian (Non Military) Agencies; DFAR's [DEPARTMENT OF DEFENSE FAR SUPPLEMENT] apply to Defense [Military] Agencies.

  1. INTRODUCTION:
  2. LICENSING SOFTWARE TO THE GOVERNMENT IS VERY COMPLEX. THIS OVERVIEW, HOPEFULLY, WILL HELP CONTRACTORS/DEVELOPERS NAVIGATE SAFELY THROUGH THE FEDERAL REGULATION MAZE TO ENSURE MAXIMUM LEGAL/BUSINESS PROTECTION.

    FIRST AND FOREMOST TO BE AWARE OF IS THAT WHENEVER THE GOVERNMENT PURCHASES TECHNICAL DATA OR COMPUTER SOFTWARE, IT RECEIVES A 'LICENSE TO USE AND DISTRIBUTE' ONLY, IN ACCORDANCE WITH THE APPLICABLE FAR/DFAR PROVISION; TITLE AT ALL TIMES REMAINS WITH THE DEVELOPER/CONTRACTOR EVEN IF GOVERNMENT FUNDS WERE USED FOR THE DEVELOPMENT. BOTH THE FAR AND DFAR HAVE VARYING LICENSING CLAUSES, DEPENDING UPON THE CLASSIFICATION OF THE DATA/SOFTWARE.

    1. LICENSING UNDER THE FAR'S IS COVERED BY 52.227-14 THRU 23 (52.227-19 SPECIFICALLY GOVERNS COMMERCIAL COMPUTER SOFTWARE).
    2. LICENSING UNDER THE DFAR'S IS DETERMINED BY THE FOLLOWING CATEGORIES OF RIGHTS:
      • UNLIMITED RIGHTS: APPLIES TO TECHNICAL DATA, COMPUTER SOFTWARE, INCLUDING SOFTWARE DOCUMENTATION, DEVELOPED BY A CONTRACTOR WITH GOVERNMENT FUNDS (See DFARS 252.227-7013 (b) (1) AND DFARS 252.227-7014 (b) (1) FOR LISTING OF CRITERIA FOR ESTABLISHING UNLIMITED RIGHTS).
      • LIMITED RIGHTS: APPLIES ONLY TO TECHNICAL DATA, (NOT TO COMPUTER SOFTWARE OR SOFTWARE DOCUMENTATION), DEVELOPED EXCLUSIVELY AT PRIVATE EXPENSE AND SUCH INFORMATION EMBODIES TRADE SECRETS OR CONFIDENTIAL INFORMATION (See DFAR'S 252.227-7013 (b) (3)).
      • RESTRICTED RIGHTS: APPLIES TO NONCOMMERCIAL COMPUTER SOFTWARE AND SOFTWARE DOCUMENTATION DEVELOPED AT PRIVATE EXPENSE (See DFAR'S 252.227-7014 (b) (3).
      • GOVERNMENT PURPOSE RIGHTS [GPR]: APPLIES WHEN MIXED-FUNDING HAS BEEN USED TO DEVELOP TECHNICAL DATA AND/OR COMPUTER SOFTWARE WHICH MAY ONLY BE USED FOR GOVERNMENT PURPOSES, INCLUDING COMPETITIVE PURPOSES, BUT EXCLUDING COMMERCIAL PURPOSES, FOR A FIVE-YEAR PERIOD, OR SUCH OTHER PERIOD AS MAY BE NEGOTIATED. AFTER EXPIRATION OF THE NEGOTIATED PERIOD, THE GOVERNMENT AUTOMATICALLY OBTAINS UNLIMITED RIGHTS. [See DFAR'S 252.227-7013 (b) (2)].
      • SPECIFICALLY NEGOTIATED LICENSE RIGHTS: APPLIES WHEN UNLIMITED, LIMITED, RESTRICTED, OR GPR RIGHTS MAY NOT FIT/MEET THE GOVERNMENTS NEEDS (See DFAR'S 252.227-7013 (b) (4)).
      • COMMERCIAL COMPUTER SOFTWARE: APPLIES TO COMPUTER SOFTWARE AND SOFTWARE DOCUMENTATION DEVELOPED EXCLUSIVELY AT PRIVATE EXPENSE; NO DFAR CLAUSE APPLIES, GOVERNMENT WILL USE AND NEGOTIATE DEVELOPER'S/CONTRACTOR'S STANDARD LICENSE AGREEMENT (See DFAR'S SUBPART 227.7202).
      • COMMERCIAL TECHNICAL DATA: APPLIES TO ANY ITEM, OTHER THAN COMPUTER SOFTWARE OR REAL PROPERTY THAT IS CUSTOMARILY USED BY THE PUBLIC FOR NONGOVERNMENTAL PURPOSES AND THAT HAS BEEN SOLD OR OFFERED FOR SALE, LEASE, OR LICENSE TO THE GENERAL PUBLIC (See NEW DFAR CLAUSE 252.227-7015).

  3. TO PROTECT THE COMPANIES INTERESTS, THE FOLLOWING CLAUSE SHOULD BE INCLUDED IN THE CONTRACTOR'S LICENSE AGREEMENT:
  4. DISTRIBUTION TO THE U.S. GOVERNMENT: The Licensed Products provided under this Agreement are commercial computer software programs developed exclusively at private expense. Use, duplication, and disclosure by civilian agencies of the U.S. Government shall be in accordance with FAR 52.227-19 (c) or other agency data rights provisions, as may be applicable. Use, duplication and disclosure by DOD agencies is subject solely to the terms of standard software License Agreement as stated in DFARS 227.7202.

    FOR COMMERCIAL COMPUTER SOFTWARE, THE FOLLOWING LEGEND SHOULD APPEAR IN THE SOFWARE (IDEALLY THE 1ST SCREEN), AND ALSO INCLUDED ON THE MEDIA AND SOFTWARE DOCUMENTATION:

    This software is commercial computer software developed exclusively at private expense. Use, duplication, and disclosure by civilian agencies of the U.S. Government shall be in accordance with FAR 52.227-19 (c) or other agency data rights provisions, as may be applicable. Use, duplication and disclosure by DOD agencies is subject solely to the terms of standard software License Agreement as stated in DFARS 227.7202. "Unpublished-All rights reserved under the Copyright Laws of the United States". Contractor/Licensor:_____________________________________.
    Name/Address

    OTHER SPECIAL LEGENDS AND MARKINGS ARE REQUIRED FOR NONCOMMERCIAL COMPUTER SOFTWARE AND TECHNICAL DATA [SEE SPECIFIC FAR/DFAR CLAUSE].

  5. GENERAL CAVEATS:
    • SEGREGATE AND IDENTIFY ALL IN-HOUSE DEVELOPMENT FUNDING TO THE PARTICULAR PRODUCT;
    • MAINTAIN DETAILED FILES RELATED TO ALL IN-HOUSE DEVELOPMENT;
    • FLOW DOWN ALL REQUIRED CLAUSES TO SUB-CONTRACTORS, MAKE SURE THE RIGHTS YOU GET FROM SUBS ARE AT LEAST THE SAME OR GREATER THAN THOSE REQUIRED TO BE PROVIDED TO THE GOVERNEMNT;
    • LICENSING REGULATIONS ARE VERY COMPLICATED; THE RULES KEEP CHANGING AND NEED TO BE MONITORED REGULARLY, WHEN IN DOUBT SEEK COMPETENT LEGAL HELP.

This Web Site is informational only and does not constitute legal advice. The law is constantly changing and you should at all times consult with legal counsel competent in your business/market area(s).

This Web site may be considered as advertising under the current Rules of the Supreme Judicial Court of Massachusetts.

Copyright © 1998 - 2006 Joseph Valof, Esq.
OnLine Counsel, OnSite Counsel and In-House Counsel Services
are all Registered Massachusetts Service Marks owned by Joseph Valof.