FAR 27.201—Patent and copyright infringement liability.

General.

FAR 27.201-1 explains the basic legal framework for patent and copyright infringement in federal contracting. It covers the Government’s exclusive-liability rule under 28 U.S.C. 1498, the fact that the Court of Federal Claims is the exclusive forum for monetary damages, and the absence of injunctive relief or a direct infringement suit against a contractor acting with Government authorization or consent. It also identifies the three key contract clauses used to manage infringement risk: the Authorization and Consent clause at 52.227-1, the Notice and Assistance Regarding Patent and Copyright Infringement clause at 52.227-2, and the Patent Indemnity clause at 52.227-3. In practice, this section tells contracting officers when and why the Government may permit use of patented inventions, require contractor cooperation if infringement claims arise, and shift certain patent infringement liability back to the contractor for commercial products or commercial services. For contractors, it signals that Government authorization does not eliminate all risk, but it does change who can be sued and what remedies are available.

Contract clauses.

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.