On December 18, 2024, the Defense Department (DOD) issued its Final Rule (Rule) amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the data rights portions of the Small Business Administration’s (SBA) Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) Program Policy Directive (the Policy Directive).
The Rule is effective on January 17, 2025. To maximize protection of SBIR/STTR data rights, government contractors should: (1) carefully review their contracts and subcontracts to identify the applicable version of the SBIR/STTR data rights clause; (2) assert data rights for technical data and computer software developed or generated under Phases I-III of SBIR/STTR contracts or subcontracts; and (3) mark such data and software with the appropriate restrictive legends.
The Rule, among other things, amends DFARS 252.227-7018, the principal contract clause applicable to the SBIR/STTR Program, to update the SBIR/STTR data protection period to a single, non-extendable 20-year period. Previously, the SBIR/STTR data protection period was a 5-year period that could be extended indefinitely. Additionally, the Rule amends DFARS 252.227-7018, which now provides the Government, upon expiration of the SBIR/STTR data protection period, perpetual Government Purpose Rights rather than Unlimited Rights. The Rule also clarifies that SBIR/STTR data encompasses all technical data or computer software developed or generated in the performance of a Phase I, II, or III SBIR/STTR contract or subcontract. Further, the Rule clarifies that while the parties may mutually negotiate special license rights, the parties may only do so after contract award, and the Government is prohibited from making negotiation of a specialized license a condition of contract award. Lastly, the Rule removes the alternate clause from DFARS 252.227-7018, which previously allowed the Government to elect not to exercise its right to publish or authorize others to publish SBIR data.
In addition to amending DFARS 252.227-7018, the Rule adds a new section to DFARS Part 227, 227.7104-1, which prohibits contracting officers from requiring offerors to relinquish SBIR/STTR data rights or from rejecting offerors solely due to SBIR/STTR data rights restrictions. However, under the Rule, the Government “may use information provided by offerors in response to a solicitation in the source selection process to evaluate the impact of proposed restrictions on the Government’s ability to use or disclose technical data or computer software” in a manner consistent with acquisition preferences and other guidance applicable to SBIR/STTR offerors.
The Rule goes into effect on January 17, 2025. Accordingly, all new contracts and subcontracts after January 17, 2025, will include the new DFARS 252.227-7018. Importantly, the Rule explains that the SBIR/STTR data protection period is governed by the version of DFARS 252.227-7018 incorporated in the contract under which the SBIR/STTR data were developed or generated. If the SBIR/STTR data were developed or generated under a contract containing a previous version of DFARS 252.227-7018, then the SBIR/STTR data protection period is governed by the previous version of this clause. As such, when determining what SBIR data rights the Government may have and for how long, it is imperative that contractors carefully review their contracts and subcontracts to determine which version of the SBIR/STTR data rights clause applies. Regardless of which version of the clause is included in your contract, to maximize protection of your SBIR/STTR data rights, contractors should continue to assert, where appropriate, SBIR/STTR data rights to all technical data and computer software developed or generated under a Phase I, II, or III SBIR/STTR contract or subcontract, and should mark such with the appropriate restrictive legends as prescribed by the DFARS.
If you have questions regarding the Rule or the SBIR/STTR Program generally, please contact Cy Alba, Joseph Loman, or another member of PilieroMazza’ s Government Contracts or Intellectual Property & Technology Rights practice groups.
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