FAR 52.227-4—Patent Indemnity-Construction Contracts.
Plain-English Summary
FAR 52.227-4 is the patent indemnity clause used in construction contracts. It tells the contractor when it must protect the Government from liability for patent infringement, including the Government’s officers, agents, and employees, and it covers infringement claims arising from performing the contract as well as from the Government’s use or disposal of the supplies furnished or work performed. The clause also carves out an important exception for patents issued on applications that are withheld from issue under a secrecy order under 35 U.S.C. 181. In addition, the clause includes an alternate version that allows the contracting officer to exclude specific items from the contractor’s patent indemnity obligation. In practice, this clause allocates patent risk to the contractor for covered infringement claims, but it also requires careful attention to the scope of the work, the items being furnished, and any listed exclusions. It matters because patent claims can create significant liability, and the clause determines who bears that risk and when the Government may be protected by contractor indemnification.
Key Rules
Contractor indemnifies Government
The contractor must indemnify the Government, including its officers, agents, and employees, against liability for infringement of any U.S. patent, unless another provision says otherwise. This indemnity includes costs and expenses associated with the infringement claim.
Applies to contract performance
The indemnity covers infringement arising out of performing the contract. That means patent exposure tied to the contractor’s methods, materials, equipment, or construction activities falls within the clause if the claim is connected to contract performance.
Covers Government use or disposal
The clause also reaches infringement arising from the Government’s use or disposal of supplies furnished or work performed under the contract. This extends the risk beyond the contractor’s on-site performance to later Government actions involving the completed work or delivered items.
Secrecy order exception
The indemnity does not apply to patents issued on applications that are now or later withheld from issue under a secrecy order under 35 U.S.C. 181. This is a specific statutory carve-out and limits the contractor’s obligation for those protected inventions.
Alternate I exclusions
Under Alternate I, the contracting officer may list specific items that are excluded from the patent indemnification requirement. Those exclusions must be identified in the contract and will narrow the contractor’s indemnity obligation for the listed items.
Clause prescribed for construction
This clause is prescribed by FAR 27.201-2(d)(1) for use in construction contracts. Its inclusion is not automatic in every procurement; it is tied to the regulatory prescription and the type of contract being awarded.
Responsibilities
Contractor
Indemnify the Government for covered patent infringement liabilities, including related costs and expenses, unless the claim falls within an express exception or exclusion. The contractor should also manage patent risk in its means and methods, materials, and subcontractor arrangements.
Contracting Officer
Insert the clause when prescribed, and if using Alternate I, specifically identify any items to be excluded from the indemnity obligation. The contracting officer should ensure the contract language accurately reflects any negotiated or required limitations.
Government
Rely on the contractor’s indemnity protection for covered claims and document any exclusions or special circumstances that limit the clause. Government personnel should also avoid actions that would expand risk beyond the contract terms without considering the indemnity framework.
Subcontractors and Suppliers
Although not directly addressed in the clause text, they may affect the contractor’s patent exposure through the materials, equipment, or methods they provide. The prime contractor should flow down appropriate risk controls and obtain protections where needed.
Practical Implications
This clause shifts patent infringement risk to the contractor for covered construction-related claims, so contractors should evaluate patent exposure before bidding and during performance.
A common pitfall is assuming the clause covers every patent issue; it does not cover patents subject to a secrecy order, and Alternate I can remove additional items from coverage.
Contractors should pay close attention to the Government’s intended use and disposal of the work, because post-performance claims can still trigger indemnity obligations.
Contracting officers should be precise when listing exclusions under Alternate I; vague or incomplete exclusions can create disputes later about what is and is not covered.
Both sides should coordinate with legal counsel when patent-sensitive materials, proprietary technologies, or specialized construction methods are involved, because the financial consequences of an infringement claim can be significant.
Official Regulatory Text
As prescribed in 27.201-2 (d)(1) , insert the following clause: Patent Indemnity-Construction Contracts (Dec 2007) Except as otherwise provided, the Contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs and expenses, for infringement of any United States patent (except a patent issued upon an application that is now or may hereafter be withheld from issue pursuant to a Secrecy Order under ( 35 U.S.C. 181 ) arising out of performing this contract or out of the use or disposal by or for the account of the Government of supplies furnished or work performed under this contract. (End of clause) Alternate I (Dec 2007) . As prescribed in 27.201-2 (d)(2), designate the first paragraph of the basic clause as paragraph (a) and add the following paragraph (b) to the basic clause: (b) This patent indemnification shall not apply to the following items: __________________________________________________ [ Contracting Officer list the items to be excluded .]