FAR 27.204-2—Use of patented technology under the General Agreement on Tariffs and Trade (GATT).
Plain-English Summary
FAR 27.204-2 is a short cross-reference provision that explains how federal use of patented technology fits within international trade and intellectual property obligations. It points readers to Article 31 of Annex 1C of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which is part of the GATT Uruguay Round agreements, and notes that Article 20.40 of the United States-Mexico-Canada Agreement (USMCA) preserves the parties’ rights under Article 31. In practical terms, this section does not itself create a separate procurement procedure or license rule; instead, it reminds agencies and contractors that government use of patented inventions may be permitted in limited circumstances under applicable law, even without the patent owner’s authorization. The section is important because patent rights can affect acquisition planning, contract performance, and the Government’s ability to obtain needed supplies or services when patented technology is involved. It also signals that international trade agreements may shape, but do not eliminate, the Government’s domestic authority to use patented technology under existing legal frameworks. Readers will find here the basic relationship between federal procurement and patent-use exceptions under international agreements, especially where government use without authorization is at issue.
Key Rules
TRIPS Article 31 governs
The section directs attention to Article 31 of Annex 1C of the TRIPS Agreement, which addresses situations where a member country’s law allows use of a patent without the patent holder’s authorization. This includes government use in appropriate circumstances.
Government use may be allowed
The cited international rule recognizes that a government may, under its own law, authorize use of patented technology without the patent owner’s consent. FAR 27.204-2 highlights that such use is contemplated by the international framework, not categorically prohibited.
USMCA preserves Article 31 rights
Article 20.40 of the USMCA preserves the parties’ rights under Article 31. In practice, this means the United States’ ability to rely on lawful government-use mechanisms is not displaced by the USMCA.
No standalone procurement procedure
This FAR section is informational rather than procedural. It does not establish a separate contracting method, approval process, or compensation formula; those issues are handled under other statutes, regulations, and contract terms.
Domestic law still controls implementation
Whether and how patented technology may be used without authorization depends on applicable U.S. law and the specific facts of the acquisition. International agreements set the backdrop, but they do not by themselves authorize a particular procurement action.
Responsibilities
Contracting Officer
Recognize when an acquisition may involve patented technology and understand that government use without authorization may be legally possible in limited circumstances. Coordinate with legal counsel and follow the applicable domestic patent-use and compensation rules rather than relying on this section alone.
Agency
Ensure acquisition planning accounts for patent issues, including whether the needed technology is patented and whether any government-use authority may apply. The agency must also comply with the governing U.S. legal framework and any required procedures if it seeks to use patented technology without authorization.
Contractor
Identify patent rights that may affect performance and disclose or manage them as required by the contract and applicable law. Contractors should not assume that a patent automatically bars Government use, but they should protect their rights through the proper legal and contractual channels.
Patent Holder / Rights Owner
Assert patent rights through the remedies and procedures available under law if the Government or a contractor uses patented technology without authorization. The rights holder may be entitled to compensation or other relief depending on the governing legal authority.
Legal Counsel / Intellectual Property Advisor
Advise on whether a proposed use of patented technology falls within government-use authority, TRIPS/USMCA context, and domestic patent law requirements. Counsel should also help determine any notice, compensation, or dispute-resolution obligations.
Practical Implications
This section is mainly a reminder to check patent issues early in acquisition planning, especially for technical items, software, manufacturing processes, and specialized equipment.
A common pitfall is treating the international agreement language as a direct license to use patented technology; it is not. The actual authority comes from domestic law and must be applied correctly.
Contracting officers should not ignore patent concerns just because the Government needs the item urgently. If patented technology is involved, legal review may be necessary to avoid infringement or compensation disputes.
Contractors should watch for specifications that may require patented methods or products and raise the issue promptly rather than waiting until performance problems arise.
Because the section is cross-referential and brief, users often overlook it. Its real value is in signaling that government use of patents is a specialized legal issue that must be handled under the proper statutory and regulatory framework.
Official Regulatory Text
Article 31 of Annex 1 C, Agreement on Trade-Related Aspects of Intellectual Property Rights, to GATT (Uruguay Round) addresses situations where the law of a member country allows for use of a patent without authorization, including use by the Government. Article 20.40 of the United States-Mexico-Canada Agreement preserves parties' rights under Article 31.