FAR 27.201-2—Contract clauses.
Plain-English Summary
FAR 27.201-2 tells contracting officers which patent-related clauses must, may, or may not be inserted in solicitations and contracts. It covers the Authorization and Consent clause at 52.227-1, including when to use Alternate I for R&D and Alternate II for certain common-carrier communication services; the Notice and Assistance Regarding Patent and Copyright Infringement clause at 52.227-2; the Patent Indemnity clause at 52.227-3, including when it applies to commercial products and services and when its alternates are used; the Patent Indemnity-Construction Contracts clause at 52.227-4, including Alternate I for excluding nonstandard or special items; and the Waiver of Indemnity clause at 52.227-5, which requires agency-head approval. The section also explains when patent indemnity clauses are optional, when they are prohibited, and when the Government may not agree to indemnify a contractor for patent infringement at all. In practice, this section is about allocating patent risk correctly, matching the clause to the type of acquisition, and avoiding unauthorized promises of Government indemnity. It matters because the wrong clause choice can create unenforceable commitments, conflict with commercial practice, or leave the Government exposed to unnecessary liability.
Key Rules
Authorization and consent required
Insert 52.227-1 in solicitations and contracts unless simplified acquisition procedures are used or both complete performance and delivery are outside the United States. This clause gives the Government’s authorization and consent for certain patent infringement that may occur in performance.
R&D uses Alternate I
Use 52.227-1 with Alternate I in all R&D solicitations and contracts whose primary purpose is R&D work. Do not use this alternate in construction or architect-engineer contracts unless the contract is exclusively for R&D work.
Common-carrier communications use Alternate II
Use 52.227-1 with Alternate II for communication services with a common carrier when the services are unregulated and not priced by a tariff schedule set by a regulatory body. The alternate tailors the clause to that commercial communications environment.
Notice and assistance follows authorization
Insert 52.227-2 in every solicitation and contract that includes 52.227-1. This clause requires notice and assistance regarding patent and copyright infringement issues tied to the authorization and consent clause.
Commercial patent indemnity is limited
Insert 52.227-3 for acquisitions that may result in commercial products or commercial services unless Part 12 procedures are used, simplified acquisition procedures are used, performance and delivery are outside the United States, or legal counsel agrees omission matches commercial practice. The clause is not automatic in commercial buying.
Commercial mixed acquisitions may need alternates
Use 52.227-3 with Alternate I or II when the contract also includes noncommercial items or services, or when legal counsel advises limiting the clause to align with commercial practice. Alternate III applies to certain unregulated common-carrier communication services.
Construction patent indemnity is specific
Insert 52.227-4 in construction contracts and fixed-price contracts for dismantling, demolition, or removal of improvements, but not in contracts solely for architect-engineer services. Alternate I may exclude identified nonstandard, noncommercial, or special items from indemnity.
Patent exclusions need agency-head approval
If the Government wants to exempt specific U.S. patents from indemnity, only the agency head can approve that exclusion. With written agency-head approval, the contracting officer may add 52.227-5, Waiver of Indemnity, alongside the appropriate patent indemnity clause.
Optional inclusion when not prescribed
If no patent indemnity clause is required by prescription, the contracting officer may still include one if doing so is in the Government’s interest. This is discretionary and should be used thoughtfully.
No Government patent indemnity promise
The contracting officer must not include any clause that makes the Government agree to indemnify a contractor for patent infringement. The FAR prohibits creating that kind of indemnity commitment in solicitations or contracts.
Responsibilities
Contracting Officer
Select and insert the correct patent-related clauses and alternates based on the acquisition type, place of performance, and commercial/noncommercial status. The contracting officer must consult legal counsel when the rule requires it, obtain written agency-head approval before using 52.227-5, and avoid inserting any clause that promises Government indemnification for patent infringement.
Agency Head
Approve in writing any decision to exempt specific U.S. patents from patent indemnity by authorizing use of 52.227-5. This approval is required before the contracting officer may include the waiver of indemnity clause.
Legal Counsel
Advise the contracting officer when determining whether omission of 52.227-3 is consistent with commercial practice or whether limiting the clause’s applicability is appropriate. Counsel’s consultation is a required decision point in the commercial patent indemnity rules.
Contractor
Comply with the patent-related clauses included in the contract, provide required notice and assistance when infringement issues arise, and understand that the Government’s authorization and consent or patent indemnity clauses do not create a blanket Government promise to indemnify the contractor.
Agency
Ensure internal approval controls are followed for patent indemnity waivers and maintain consistency with Government policy on patent risk allocation. Agencies should also support contracting officers in applying the correct clause structure for the acquisition type.
Practical Implications
Clause selection is highly acquisition-specific, so contracting officers should verify whether the buy is commercial, R&D, construction, A-E, communications, or outside the United States before drafting the solicitation.
A common mistake is treating patent indemnity as a standard clause for all contracts; this section limits when it applies and requires legal review or special approval in several situations.
Do not confuse excluding specific items from indemnity with excluding specific patents from indemnity: item exclusions can be handled through Alternate I in some cases, but patent exclusions require agency-head approval and use of 52.227-5.
For commercial acquisitions, the default is not always to include patent indemnity; Part 12, simplified acquisition procedures, foreign performance/delivery, and commercial-practice determinations can all change the result.
Never add language that makes the Government indemnify the contractor for patent infringement, because the FAR expressly forbids that commitment even if the parties think it would be commercially convenient.
Official Regulatory Text
(a) (1) Insert the clause at 52.227-1 , Authorization and Consent, in solicitations and contracts except that use of the clause is- (i) Optional when using simplified acquisition procedures; and (ii) Prohibited when both complete performance and delivery are outside the United States. (2) Use the clause with its Alternate I in all R&D solicitations and contracts for which the primary purpose is R&D work, except that this alternate shall not be used in construction and architect-engineer contracts unless the contract calls exclusively for R&D work. (3) Use the clause with its Alternate II in solicitations and contracts for communication services with a common carrier and the services are unregulated and not priced by a tariff schedule set by a regulatory body. (b) Insert the clause at 52.227-2 , Notice and Assistance Regarding Patent and Copyright Infringement, in all solicitations and contracts that include the clause at 52.227-1 , Authorization and Consent. (c) (1) Insert the clause at 52.227-3 , Patent Indemnity, in solicitations and contracts that may result in the delivery of commercial products or the provision of commercial services unless- (i) part 12 procedures are used; (ii) The simplified acquisition procedures of part 13 are used; (iii) Both complete performance and delivery are outside the United States; or (iv) The contracting officer determines after consultation with legal counsel that omission of the clause would be consistent with commercial practice. (2) Use the clause with either its Alternate I (identification of excluded items) or II (identification of included items) if- (i) The contract also requires delivery of items that are not commercial products or the provision of services that are not commercial services; or (ii) The contracting officer determines after consultation with legal counsel that limitation of applicability of the clause would be consistent with commercial practice. (3) Use the clause with its Alternate III if the solicitation or contract is for communication services and facilities where performance is by a common carrier, and the services are unregulated and are not priced by a tariff schedule set by a regulatory body. (d) (1) Insert the clause at 52.227-4 , Patent Indemnity-Construction Contracts, in solicitations and contracts for construction or that are fixed-price for dismantling, demolition, or removal of improvements. Do not insert the clause in contracts solely for architect-engineer services. (2) If the contracting officer determines that the construction will necessarily involve the use of structures, products, materials, equipment, processes, or methods that are nonstandard, noncommercial, or special, the contracting officer may expressly exclude them from the patent indemnification by using the clause with its Alternate I. Note that this exclusion is for items, as distinguished from identified patents (see paragraph (e) of this subsection). (e) It may be in the Government’s interest to exempt specific U.S. patents from the patent indemnity clause. Exclusion from indemnity of identified patents, as distinguished from items, is the prerogative of the agency head. Upon written approval of the agency head, the contracting officer may insert the clause at 52.227-5 , Waiver of Indemnity, in solicitations and contracts in addition to the appropriate patent indemnity clause. (f) If a patent indemnity clause is not prescribed, the contracting officer may include one in the solicitation and contract if it is in the Government’s interest to do so. (g) The contracting officer shall not include in any solicitation or contract any clause whereby the Government agrees to indemnify a contractor for patent infringement.