FAR 27.102—General guidance.
Plain-English Summary
FAR 27.102 provides the Government’s general policy framework for intellectual property issues in federal contracting. It addresses five main topics: the Government’s encouragement of maximum practical commercial use of inventions made under Government contracts, the general rule that the Government will not refuse to award a contract merely because a prospective contractor may infringe a patent, the Government’s ability to authorize and consent to patent use in certain contracts, the expectation that contractors supplying commercial products and commercial services will indemnify the Government against U.S. patent infringement liability, the Government’s recognition of contractor rights in data developed at private expense and its limits on data delivery demands, and the requirement that contractors obtain permission before including third-party copyrighted works in deliverables. In practice, this section signals that the Government wants access to needed technology and data without unnecessarily taking contractor rights or shifting avoidable IP risk to the Government. It also tells contractors and contracting officers that IP issues must be handled deliberately in the solicitation and contract, especially where patents, data rights, and copyrighted materials may affect performance or delivery. The section is policy guidance rather than a detailed clause prescription, but it shapes how agencies structure solicitations, negotiate terms, and manage risk.
Key Rules
Promote commercial use
The Government encourages maximum practical commercial use of inventions made under Government contracts. This reflects a policy preference for technologies that can be used in both Government and commercial markets, rather than restricting inventions to Government-only use.
Patent risk not a bar
As a general rule, the Government will not refuse to award a contract simply because the prospective contractor may infringe a patent. Patent infringement risk is usually handled through contract terms and risk allocation, not by excluding the offeror from award.
Authorization and consent
The Government may authorize and consent to the use of inventions in performance of certain contracts, even if those inventions are covered by U.S. patents. This protects contractors from certain infringement liability when they are acting within the scope of Government authorization.
Commercial indemnity expected
For commercial products and commercial services, contractors generally should indemnify the Government against liability for infringement of U.S. patents. In practice, this means the contractor is often expected to bear the patent risk associated with its commercial offering.
Limit data demands
The Government recognizes rights in data developed at private expense and limits its demands for delivery of that data. When private-expense data is delivered, the Government should acquire only the rights essential to its needs, rather than broader rights than necessary.
Protect third-party copyrights
The Government generally requires contractors to obtain permission from copyright owners before including copyrighted works owned by others in data delivered to the Government. Contractors must manage permissions proactively to avoid unauthorized inclusion of third-party material.
Responsibilities
Contracting Officer
Structure solicitations and contracts to reflect the Government’s IP policy, including appropriate patent authorization and consent language, data rights terms, and any required copyright-related protections. The contracting officer should also avoid unnecessary demands for privately developed data rights and ensure the contract allocates infringement risk appropriately.
Contractor
Identify and manage patent, data rights, and copyright issues in its proposed solution and performance. The contractor should seek needed permissions, provide required indemnities for commercial products and services where applicable, and ensure that any data delivered to the Government does not include third-party copyrighted material without authorization.
Agency
Apply the policy consistently to encourage commercial innovation while protecting the Government’s legitimate needs. The agency should ensure its acquisition strategy and contract terms do not overreach on data rights or create avoidable IP barriers to competition and performance.
Copyright Owner / Patent Owner
Grant permissions or licenses when their protected works or inventions are to be used in a way that requires authorization for contract performance or delivery. Their rights remain protected, but the Government’s policy anticipates that contractors will secure the necessary permissions.
Practical Implications
This section is a warning that intellectual property issues should be addressed early, not after award or during delivery. Contractors should review patent exposure, data rights, and third-party content before submitting proposals.
For commercial acquisitions, patent indemnity is often a standard negotiation point. Contractors should check whether their commercial terms already include indemnification and whether those terms are acceptable to the Government.
Data rights disputes often arise when agencies ask for more than they need. Contractors should distinguish between privately developed data and Government-funded data, and should push back when delivery requirements exceed the Government’s essential needs.
Including third-party copyrighted material in technical manuals, reports, software documentation, or other deliverables can create compliance problems. Contractors should track embedded content and secure permissions before delivery.
Contracting officers should use this policy to avoid overreaching clauses that chill commercial participation. The practical goal is to obtain the Government’s needed rights and protections without unnecessarily taking contractor IP or forcing noncommercial terms onto commercial offerings.
Official Regulatory Text
(a) The Government encourages the maximum practical commercial use of inventions made under Government contracts. (b) Generally, the Government will not refuse to award a contract on the grounds that the prospective contractor may infringe a patent. The Government may authorize and consent to the use of inventions in the performance of certain contracts, even though the inventions may be covered by U.S. patents. (c) Generally, contractors providing commercial products and commercial services should indemnify the Government against liability for the infringement of U.S. patents. (d) The Government recognizes rights in data developed at private expense, and limits its demands for delivery of that data. When such data is delivered, the Government will acquire only those rights essential to its needs. (e) Generally, the Government requires that contractors obtain permission from copyright owners before including copyrighted works, owned by others, in data to be delivered to the Government.