Defense Federal Acquisition Regulation Supplement: Small Business Innovation Research Program Data Rights (DFARS Case 2019-D043)

<RULE> DEPARTMENT OF DEFENSE <SUBAGY>Defense Acquisition Regulations System</SUBAGY> <CFR>48 CFR Parts 212, 227, and 252</CFR> <DEPDOC>[Docket DARS-2020-0033]</DEPDOC> <RIN>RIN 0750-AK84</RIN> <SUBJECT>Defense Federal Acquisition Regulation Supplement: Small Business Innovation Research Program Data Rights (DFARS Case 2019-D043)</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Defense Acquisition Regulations System, Department of Defense (DoD). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the data rights portions of the Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directives. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective January 17, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Mr. David Johnson, telephone 202-913-5764. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> DoD published a proposed rule in the <E T="04">Federal Register</E> at 87 FR 77680 on December 19, 2022, to implement in the DFARS the intellectual property ( <E T="03">e.g.,</E> data rights) portions of the Small Business Administration's (SBA's) revised Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) Program Policy Directive. DoD had previously published an advance notice of proposed rulemaking (ANPR) at 85 FR 53758 on August 31, 2020. Six respondents submitted written public comments in response to the proposed rule. <HD SOURCE="HD1">II. Discussion and Analysis</HD> DoD reviewed the public comments submitted in writing and discussed by the attendees at the virtual public meetings on February 2, 2023, and March 2, 2023, in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments is provided, as follows: <HD SOURCE="HD2">A. Summary of Significant Changes From the Proposed Rule</HD> Based on the comments received, the following DFARS guidance, contract clauses, and solicitation provisions are revised: • DFARS 227.7104-1 is revised to further explain the scope of SBIR/STTR Phase III work to which the SBIR/STTR data rights clauses apply. • DFARS 227.7104-2 is revised to provide a list of applicable clauses and policies that govern the Government's license rights in any data that are not SBIR/STTR data. • The following provision and clauses are revised to ensure consistent definitions of the term “SBIR/STTR data” and the term “generated”: DFARS 252.227-7013, Rights in Technical Data—Other Than Commercial Products or Commercial Services; 252.227-7014, Rights in Other Than Commercial Computer Software and Other Than Commercial Computer Software Documentation; 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions; and 252.227-7018, Rights in Other Than Commercial Technical Data and Computer Software—Small Business Innovation Research Program and Small Business Technology Transfer Program. • DFARS 252.227-7018(c)(2)(ii)(B) is revised to remove language that may have been misinterpreted to imply that special licenses may be negotiated prior to contract award when the standard license rights are SBIR/STTR data rights. • The provision at DFARS 252.227-7040, Additional Preaward Requirements for Small Business Technology Transfer Program, and the clause at DFARS 252.227-7041, Additional Postaward Requirements for Small Business Technology Transfer Program, are revised to clarify STTR program requirements regarding consistency between the clause at DFARS 252.227-7018 and written agreements between the offeror and a research institution, and regarding written representations related to the written agreements in preaward submissions and postaward updates. • Proposed changes to the marking requirements related to restrictions on third-party recipients of technical data and computer software (in the clauses at DFARS 252.227-7013, 252.227-7014, and 252.227-7018) have been removed from this rule. Proposed changes regarding restrictive markings on technical data related to commercial technology in the clause at DFARS 252.227-7015, Technical Data—Commercial Products and Commercial Services, have also been removed from this rule. <HD SOURCE="HD2">B. Analysis of Public Comments</HD> <HD SOURCE="HD3">1. Restrictive Marking Requirements</HD> <E T="03">Comment:</E> Several respondents provided comments and recommended revisions to proposed changes to restrictive marking requirements in DFARS 252.227-7013, 252.227-7014, 252.227-7015, and 252.227-7018. <E T="03">Response:</E> As discussed in the ANPR, DoD proposed revisions to address the SBIR/STTR Policy Directive's emphasis on requiring restrictive markings for SBIR/STTR data, while ensuring appropriate procedures to address the inadvertent omission of restrictive markings by SBIR/STTR contractors. These issues are addressed by clarifying that the long-standing requirements for identification and marking of deliverable other than commercial technical data and software, including the procedures to address inadvertent omission of restrictive markings, apply to SBIR/STTR data. For example, this final rule adds references to the clause at DFARS 252.227-7018 at DFARS 227.7103-10 and 227.7103-12 for other than commercial technical data and DFARS 227.7203-10 and 227.7203-12 for other than commercial computer software; and incorporating such procedures into all associated clauses at DFARS 252.227-7013, 252.227-7014, and 252.227-7018). As discussed in the proposed rule, DoD proposed further revisions to address additional related matters regarding the absence of restrictive markings ( <E T="03">e.g.,</E> the lack of an unlimited rights marking), and to address additional public comments and recent case precedent regarding requirements, restrictions, and procedures for correcting nonconforming markings, in cases of commercial markings and markings directed to non-Government, third-party recipients of marked data. The vast majority of the public comments were directed to complex matters related to these additional markings issues, rather than the more limited markings topics addressed in the SBIR/STTR Policy Directive. To expedite implementation of the primary SBIR/STTR policy elements of this DFARS case while enabling further consideration of comments and recommendations from the public on proposed revisions directed to such additional important marking requirements in these clauses, these regulatory changes related to marking requirements have been removed from this final rule ( <E T="03">e.g.,</E> unlimited rights markings, markings for commercial technical data, and markings directed to third-party recipients). <HD SOURCE="HD3">2. Scope and Applicability of Clauses and Scope of License Rights</HD> <HD SOURCE="HD3">a. Applicability Section of the Clauses</HD> <E T="03">Comment:</E> Several respondents recommended removal or revision of the proposed applicability sections in the data rights clauses. A respondent asserted that proposed applicability sections of the clauses should indicate that the SBIR/STTR clauses are no longer applicable to SBIR/STTR data once the related product becomes commercial. Other respondents recommended revisions to the proposed applicability sections to remove applicability of DFARS 252.227-7013 to portions of a commercial item that was developed in any part at Government expense. Lastly, other respondents recommended moving the applicability sections to a later section of the clauses to reduce the administrative burden on contractors resulting from changes in paragraph numbering in restrictive markings. <E T="03">Response:</E> In view of DFARS drafting conventions, DoD added applicability sections to paragraph (b) of the clauses and the associated guidance to contracting officers to clarify contractors' and contracting officers' understanding of the scope of DFARS 252.227-7013, 252.227-7014, 252.227-7015, and 252.227-7018. These revisions reflect the existing prescriptive guidance found in DFARS 227.7102-4, 227.7104, and the SBIR/STTR Policy Directive, none of which exclude or limit the applicability of the SBIR/STTR program requirements once the related product becomes commercial. These revisions will ensure proper application of the SBIR/STTR data rights clause, as prescribed in the SBIR/STTR Policy Directive, and other clauses. For this reason, DoD has not adopted the respondents' recommendations for removal or revision of the applicability sections. <HD SOURCE="HD3">b. Guidance on Scope of SBIR/STTR Contracts, Including Phase III Work</HD> <E T="03">Comment:</E> One respondent asserted that part 227 should be revised to define the scope of SBIR/STTR contracts by referencing the definition in the SBIR/STTR Policy Directive. Another respondent recommended clarifying the scope of Phase III work. <E T="03">Response:</E> DoD has partially adopted these recommendations. Based on guidance from the SBIR/STTR Policy Directive, DFARS 227.7104-1 is revised to further clarify the scope of applicability of SBIR/STTR data rights and the scope of SBIR/STTR Phase III work. <HD SOURCE="HD3">c. Guidance on the SBIR Protection Period</HD> <E T="03">Comment:</E> A respondent recommended providing guidance on how the SBIR protection period applies to multiple awards at various SBIR phases. <E T="03">Response:</E> DFARS 227.7104-2(a)(2) provides the guidance recommended by the respondent. In addition, DFARS Procedures, Guidance, and Information 227.7104-2 provides examples and guidance on how the SBIR or SBIR/STTR protection period applies in each example. <HD SOURCE="HD3">d. Guidance on Applicability of Commercial Computer Software Licenses</HD> ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 206k characters. 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