FAR 27.301—Definitions.
Plain-English Summary
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.
Key Rules
Invention includes patentable discoveries
An “invention” is any invention or discovery that is or may be patentable or otherwise protectable under title 35 of the U.S. Code, and it also includes any plant variety that is or may be protectable under the Plant Variety Protection Act. This definition is broad and is meant to capture more than just issued patents.
Made means conception or reduction
For non-plant inventions, “made” means either the conception of the invention or its first actual reduction to practice. For plant varieties, “made” means the contractor has at least tentatively determined that the variety has been reproduced with recognized characteristics.
Nonprofit organization has a specific meaning
A “nonprofit organization” includes universities and other institutions of higher education, organizations described in section 501(c)(3) and exempt under section 501(a) of the Internal Revenue Code, and nonprofit scientific or educational organizations qualified under a State nonprofit statute. This definition matters because nonprofit status can affect patent rights treatment under federal contracting rules.
Practical application requires real-world use
“Practical application” means manufacturing a composition or product, practicing a process or method, or operating a machine or system, in each case under conditions showing the invention is being used and its benefits are available to the public on reasonable terms, to the extent allowed by law and Government regulations. The focus is on actual utilization, not just development or intent to use.
Subject invention ties the invention to the contract
A “subject invention” is any invention of the contractor that is made in the performance of work under a Government contract. This is the core trigger for the patent rights rules in this subpart, because it identifies which contractor inventions fall within the Government contract framework.
Responsibilities
Contractor
Identify whether an invention was made in performance of Government contract work, determine whether it is a subject invention, and apply the correct definition of “made” when assessing when rights and reporting obligations arise. Contractors that are nonprofits must also recognize whether they qualify under the nonprofit definition for purposes of the patent rights rules.
Nonprofit organization
Confirm and document nonprofit status under the applicable tax or State nonprofit criteria when relying on the special treatment available to nonprofits under the patent rights framework. Universities and other nonprofit performers must use the definitions here to determine whether their inventions and reporting obligations fall within the subpart.
Contracting Officer
Use these definitions when administering patent rights clauses, evaluating whether an invention is a subject invention, and determining whether a contractor qualifies as a nonprofit organization. The contracting officer must apply the definitions consistently when reviewing disclosures, rights assertions, and related contract actions.
Agency
Apply these definitions in agency patent rights administration, including invention reporting, rights determinations, and oversight of contractor compliance. Agencies must ensure their personnel interpret the terms consistently across contracts and invention-related actions.
Practical Implications
These definitions control the threshold question of whether the patent rights rules apply at all, so a misclassification can lead to missed disclosures, incorrect ownership assumptions, or improper rights determinations.
Contractors should not wait for a patent application or issued patent before treating something as an invention; the definition is broad enough to include patentable discoveries and plant varieties at an earlier stage.
The meaning of “made” is important for timing: conception or first actual reduction to practice can trigger invention-related obligations, so records and lab documentation matter.
Nonprofit status is not informal or assumed; organizations should be able to show they fit the regulatory definition, especially universities and research nonprofits that rely on special patent rights treatment.
“Practical application” is about actual public use and availability on reasonable terms, so merely holding an invention, filing a patent, or planning commercialization is not enough to satisfy the concept.
Official Regulatory Text
As used in this subpart- Invention means any invention or discovery that is or may be patentable or otherwise protectable under title 35 of the U.S. Code, or any variety of plant that is or may be protectable under the Plant Variety Protection Act ( 7 U.S .C. 2321 , et seq .) Made means- (1) When used in relation to any invention other than a plant variety, means the conception or first actual reduction to practice of the invention; or (2) When used in relation to a plant variety, means that the contractor has at least tentatively determined that the variety has been reproduced with recognized characteristics. Nonprofit organization means a university or other institution of higher education or an organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1954 ( 26 U.S.C. 501(c) ) and exempt from taxation under section 501(a) of the Internal Revenue Code ( 26 U.S.C. 501(a) ), or any nonprofit scientific or educational organization qualified under a State nonprofit organization statute. Practical application means to manufacture, in the case of a composition or product; to practice, in the case of a process or method; or to operate, in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are, to the extent permitted by law or Government regulations, available to the public on reasonable terms. Subject invention means any invention of the contractor made in the performance of work under a Government contract.