FAR 27.3—Subpart 27.3

Scope of subpart.

FAR 27.300 is the scope statement for FAR subpart 27.3, which governs inventions made during performance of Government contracts and subcontracts for experimental, developmental, or research work. It tells readers that this subpart contains the policies, procedures, solicitation provisions, and contract clauses used to address invention rights and related obligations when the work is R&D in nature. It also makes clear that agencies may issue their own supplemental policies, procedures, solicitation provisions, and clauses, but only to the extent allowed by law and consistent with applicable regulations, including 37 CFR 401.1. In practice, this section is important because it signals that invention ownership, disclosure, reporting, and related patent-rights terms are not handled ad hoc; they are governed by a structured regulatory framework that can vary by agency within legal limits. Contractors and contracting officers should use this section as the gateway to determine whether agency-specific patent rights requirements apply and to identify the governing clauses for a particular R&D procurement.

Definitions.

FAR 27.301 is the definitions section for the patent rights subpart, and it supplies the key terms that control how invention ownership, disclosure, and patent-related obligations are interpreted in federal contracts. It defines “invention,” “made,” “nonprofit organization,” “practical application,” and “subject invention,” which are foundational concepts used throughout the Government’s patent rights framework. In practice, these definitions determine whether something is patentable, when an invention is considered created, whether a contractor qualifies for special nonprofit treatment, whether an invention has been put to real-world use for public benefit, and whether a particular invention falls within the Government contract patent rights rules. Because later FAR provisions rely on these terms, getting the definitions right is essential for contractors, universities, nonprofits, and contracting personnel when identifying inventions, reporting them, and deciding rights and obligations under a Government contract.

Policy.

FAR 27.302 states the Government’s patent policy for inventions made under federally supported research and development, tying the FAR to 35 U.S.C. chapter 18, 37 CFR part 401, the Presidential Memorandum on Government Patent Policy, and Executive Order 12591. It explains the Government’s objectives for using the patent system, encouraging industry participation, promoting commercialization and public availability, preserving free competition and future research, and ensuring the Government receives sufficient rights while minimizing administrative cost. The section then addresses the contractor’s general right to elect title to a subject invention after disclosure, the limited circumstances when a contract may require assignment of title to the Government, and the contractor’s ability to request greater rights when the Government otherwise has title. It also covers special national security and DOE naval nuclear propulsion exceptions, the Government’s worldwide license in subject inventions, the Government’s right to receive title when the contractor fails to disclose or maintain rights, utilization reporting and confidentiality of those reports, and the Government’s march-in rights under 35 U.S.C. 203. In practice, this section is the core policy framework for allocating patent rights in federal R&D contracts and funding agreements, and it affects disclosure timing, title elections, patent prosecution decisions, reporting obligations, and the Government’s ability to intervene if inventions are not being made available to the public.

Contract clauses.

FAR 27.303 tells contracting officers when to include patent rights clauses in solicitations and contracts, and which clause or alternate to use based on the type of work, the contractor, and special legal or policy circumstances. It covers experimental, developmental, and research work; construction and architect-engineer services that include R&D, test and evaluation, or novel facility design; and the exclusion of standard construction from patent rights coverage. It also addresses the default clause at 52.227-11, Patent Rights—Ownership by the Contractor, the circumstances for using its alternates I through V, and when to modify the clause to require invention listings, closeout reports, patent application data, or inspection rights. In addition, it explains when to use a patent rights clause for interagency acquisitions, when agency procedures control for DoD, DOE, and NASA contracts with large businesses, and when the Government-ownership clause at 52.227-13 may be used because of foreign contractors, exceptional circumstances, national security, or certain DOE nuclear propulsion/weapons facilities. In practice, this section is about allocating invention ownership and reporting obligations up front so the Government protects its interests, contractors understand their rights, and agencies comply with Bayh-Dole and related patent policy requirements.

Procedures.

Administration of patent rights clauses.

Licensing background patent rights to third parties.

FAR 27.306 limits when the Government may force a contractor to license its patent rights to third parties, but only in a narrow set of circumstances involving small business concerns and nonprofit organizations. The section specifically addresses provisions in contracts that would allow the Government to require third-party licensing of inventions owned by the contractor that are not subject inventions, and it sets out the approval and justification process the agency must follow before including or enforcing such a provision. It also explains the substantive findings the agency head must make: that third-party use is necessary to practice a subject invention or use a work object of the contract, and that the action is needed to achieve practical application of the subject invention or work object. In addition, the section requires a formal record, an opportunity for a hearing, notice by certified or registered mail, and a statement advising the contractor of the 60-day deadline to seek judicial review. In practice, this provision protects contractor-owned background inventions from compelled licensing except in exceptional cases, while preserving a limited Government tool to ensure that federally supported inventions or contract work can actually be used in the public interest.