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Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Clarify Data Rights and Intellectual Property Issues
Clarify Data Rights and Intellectual Property Issues
Data rights are the rights the Postal Service obtains for technical data or
computer software that suppliers deliver after completion of a project. Data
are recorded information, regardless of form or the medium on which they are
recorded. Data in this regard include technical data and computer software,
but do not include information incidental to contract management, such as
financial, administrative, cost, pricing, or management information.
Intellectual property is the ownership of ideas and control over the tangible or
virtual representation of those ideas. It is a product of the intellect that has
commercial value, including copyrighted property (such as computer
software) and ideational property (such as patents, business methods, and
industrial processes). Data rights are intellectual property.
The following are reasons for the Postal Service's purchase of intellectual
property:
• Enhance the competitive purchasing process
• Ensure the ability to use, maintain, repair, and modify equipment
or products procured under Postal Service contracts
• Recoup development costs of, and fund improvements in, Postal
Service products and equipment
• Develop or enhance products and equipment for Postal Service
use
• Protect its position in the competitive marketplace
• Ensure competition for spare parts
The main motivation of the Purchase/SCM Team when dealing with data
rights and intellectual property is to yield a net benefit to the Postal Service.
The Purchase/SCM Team must give full consideration to the costs and
benefits of the chosen approach. For example, decisions to acquire Postal
Service title to patents or unlimited rights to technical data developed by the
supplier at private expense must take into account the potential impact on the
cost of the contract and the extent to which prospective providers may not
wish to part with such rights. Conversely, the Purchase/SCM Team's
determinations to take lesser rights must consider the effect on the Postal
Service of the exploitation of those rights by the supplier or others. As stated
in Provision 8-1: Alternate Intellectual Property Rights Proposals, the
Contracting Officer will consider alternate intellectual property rights
proposals when determining which supplier's proposal is most favorable to
the Postal Service, in accordance with the solicitation's evaluation and award
section.
Pursuant to Provision 8-1: Alternate Intellectual Property Rights Proposals,
the supplier may propose alternate intellectual property rights arrangements
(including licensing arrangements for commercial exploitation of intellectual
property developed under the contract), provided that it follows guidelines
addressed in the provision.
The Postal Service acquires patent rights, rights in data, and rights in
software to the degree necessary to protect its interests. Those rights can
include:
• Title
• Nonexclusive licenses
• Unlimited rights or title to technical data and software
• Limited rights to technical data and restricted rights in software
(may be exclusive or nonexclusive)
Clarifying data rights and intellectual property informs the Postal Service of
which suppliers can and will comply with their policies. It also allows the
Purchase/SCM Team to start a dialogue with possible suppliers to negotiate
acceptable terms in regard to proprietary information. This will allow the
contract to be negotiated in a timely manner.
Data rights can be:
• Unlimited - possess right to use, disclose, reproduce, prepare
derivative works, distribute copies to the public, and perform and
display publicly, in any manner and for any purpose, and to have
or permit others to do so.
• Limited - technical data developed at private expense; license
rights restrict use or disclosure by the Postal Service.
• Restricted - computer or licensed software developed at private
expense if the Postal Service chooses not to pay for title. License
rights restrict disclosure by the Postal Service; however, may be
copied to transfer computer; copied or transferred for archiving
backup; may be modified, adapted, or combined with other
computer software (new software then subject to restricted right
limitations), disclosed to support services suppliers to prepare
modifications (must agree not to disclose to others), and may be
transferred to a replacement computer.
Other intellectual property includes:
• Copyright - an entity has exclusive rights to reproduce, publish,
or sell its original work or authorship (e.g., scripts are protected
by copyrights)
• Patent - available for the invention or discovery of any new and
useful process, machine, manufacture, composition of matter, or
any new and useful improvement of them (e.g., a product is
protected by a patent).
• Trademark - a name, symbol, or other device identifying a
product, officially registered, and legally restricted to the use of
the owner or manufacturer (e.g., protects the name of a
company).
• Trade secret - any formula, pattern, device, or compilation of
information that is used in a business and that gives it an
opportunity to obtain an advantage over competitors who do not
know or use it (e.g., protects the Coca-Cola syrup formula)
Clause 8-6: Rights in Technical Data addresses the Postal Service's rights
regarding any data other than computer data. The allocation of rights in any
computer programs, databases, and documentation will be determined by
Clause 8-9: Rights in Computer Software, except that limited rights data,
formatted as computer databases for delivery to the Postal Service, are to be
treated as limited rights data under Clause 8-6.
Clause 8-9: Rights in Computer Software addresses the Postal Service's
rights regarding computer programs, computer databases, and their
documentation. Clause 8-7: Withholding Payment (Technical Data and
Computer Software) discusses payment to the supplier by the Postal Service
and is used in contracts for both technical data and computer software rights.
If the data requirements are not adequately fixed and specified at the time of
contracting, Clause 8-8: Additional Data Requirements must also be
included in the contract.
Special works are literary works, including technical reports, studies, and
similar documents; music and dramatic works; and recorded information,
regardless of the form or medium on which it may be recorded. Special works
can include:
• The production of audiovisual works (including motion pictures
and television recordings or the preparation of motion picture
scripts, musical compositions, sound tracks, translations,
adaptations, etc.)
• Histories of the Postal Service
• Works pertaining to recruiting, morale, training, or career
guidance
• Surveys of facilities
• Works pertaining to the instruction or guidance of Postal Service
employees in the discharge of their official duties
• Production of technical reports, studies, or similar documents not
otherwise covered
A contract for special works must enable the Postal Service to obtain
ownership of the copyright for certain works. This is accomplished by contract
provisions requiring the supplier to assign copyrights to the Postal Service in
those works in which the Postal Service would not otherwise be considered
the author. These rights and other related issues are addressed in Clause
8-10: Rights in Data - Special Works.
Contracts for the purchase of existing works (other than computer programs
and audiovisual works), such as books and periodicals, generally require no
specific contract coverage for data rights. When reproduction rights are
required in such works, specific contract coverage is needed. These issues
are addressed in Clause 8-11: Rights in Data - Existing Works.
With respect to subject inventions (any invention or discovery, whether or not
patentable, conceived or first actually reduced to practice in the course of or
under a contract), the supplier, in accordance with Clause 8-1: Patent Rights,
must furnish the Contracting Officer certain items. Other patent issues
(including payment) are also addressed in Clause 8-1.
In accordance with Clause 8-2: Authorization and Consent, the liability of the
Postal Service for patent infringement or for the unauthorized use of any
patent will be determined by the provisions of any patent indemnity clause
included in the contract or in any subcontract under the contract (at any tier)
and by any indemnification or warranty (express or implied) otherwise
provided by the supplier or subcontractor for similar products or services
when supplied to commercial buyers. Clause 8-2: Authorization and Consent
also deals with research and development work, supplies and construction,
and subcontracts expected to exceed $50,000.
Patent infringements are addressed in Clause 8-3: Notice and Assistance
Regarding Patent and Copyright Infringement. Other patent rights are stated
in Clause 8-15: Patent Rights Supplier Retention.
In accordance with Clause 4-1: General Terms and Conditions, paragraph h,
Patent Indemnity, the supplier will indemnify (protect against damage, loss, or
injury; insure) the Postal Service and its officers, employees, and agents
against liability, including costs for actual or alleged direct or contributory
infringement of, or inducement to infringe, any United States or foreign
patent, trademark, or copyright, arising out of the performance of a contract,
provided the supplier is reasonably notified of such claims and proceedings.
In addition, Clause 8-4: Patent Indemnity, which may be used in place of
paragraph h, requires the supplier to indemnify the Postal Service, its
employees, and its agents against liability, including costs and fees, for patent
infringement (or unauthorized use) arising from the manufacture, use, or
delivery of supplies, the performance of service, the construction or alteration
of real property, or the disposal of property by or for the Postal Service, if the
supplies, service, or property (with or without relatively minor modifications)
have been or are being offered for sale or use in the commercial marketplace
by the supplier, except in certain situations. These situations and patent
indemnity is further addressed in Clause 8-4.
Indemnification by the supplier solely with respect to certain patents can be
waived when these patents are listed in Clause 8-5: Waiver of Indemnity.
The use of private funds for development affects the classification of data
rights. If private funds were used, technical data may have to be acquired
with limited rights, and computer software may have to be acquired with
restricted rights.
In accordance with Provision 8-2: Representation of Rights in Data, the
supplier must identify in its proposal the data (including
subcontractor-furnished data) that it intends to identify as "limited rights data"
or "restricted computer software," or that it does not intend to provide as
required. When the data are delivered to the Postal Service, the supplier
places on the data the limited rights legend required by Provision 8-2:
Representation of Rights in Data. The Postal Service has strict policies on
keeping the limited and restricted classification, which include:
• Proof that private funds were used
• Only certain portions of a product once modified or enhanced are
deemed still made from private expense
• Submitting correct markings (addressed in Clause 8-16: Postal
Service Title in Technical Data and Computer Software)
If these policies are not followed, it is possible for the Postal Service to
change the classification to "unlimited." Clause 8-14: Acquisition of
Additional Rights in Data addresses unlimited rights, direct license rights, and
other rights.
Any request for proposals (RFP) that may result in a contract other than a
firm-fixed-price contract must include Provision 8-4: Royalty Report with
regard to any royalties or license fees that would be paid in connection with
the performance of any resulting contract. The Contracting Officer must
consult Legal Counsel regarding any royalties or license fees that are
excessive or that the Postal Service may not be obligated to pay. When the
price of a contract is based in part on a contingency for patent royalties or
license fees to be paid by the supplier that the supplier may not actually have
to pay, Clause 8-12: Refund of Royalties must be included in the contract.
As stated in Provision 8-3: Use of Limited Rights Data for Purchasing of
Repair Parts and Clause 8-18: Manufacture of Repair Parts, the Postal
Service has the unilateral right to use competitive procedures to procure
repair parts or assemblies for the equipment or supply items being developed
under a contract. If the repair parts or assemblies have been identified as
being subject to protection under Provision 8-3: Use of Limited Data Rights
for Purchasing of Repair Parts or Clause 8-17: Delivery of Limited Rights
and Restricted Computer Software, the Postal Service will obtain a
nondisclosure agreement from interested suppliers before releasing any
drawings, specifications, or other descriptive documentation suitable for
manufacturing or reproducing such repair parts of assemblies.
Contracts for professional consulting, research, technical development, or
other specialized support services may require access to Postal Service
information. The products of such contracts may not otherwise be covered by
other policies and generally have unknown long-term implications; therefore,
they require that broad rights in intellectual property flow to the Postal
Service. Clause 8-13: Intellectual Property Rights must be included in such
contracts; this clause addresses what the supplier agrees to.
The Contracting Officer is the lead on clarifying data rights and intellectual
property issues. The Market Analyst and Pricing Analyst aid in determining
best value, which dictates certain decisions with data rights and intellectual
property. The Law Department's Intellectual Property Law organization, which
is responsible for intellectual property matters, must concur (or at least be
notified) in most situations when the Contracting Officer chooses alternatives
to the Postal Service's standard policies. In addition, the Contracting Officer
needs concurrence from the Intellectual Property Counsel when:
• Choosing an alternative arrangement to acquire a title to an
invention
• Soliciting alternate agreements for the purchase of patent rights
• Waiving or modifying the right to patent indemnification
(indemnification is used to protect against damage or loss)
The Postal Service will protect proprietary business information to the extent
required by law and good business practice. The Purchase/SCM Team must
understand what data rights and intellectual property are, as well as the
Postal Service's authority, responsibility, and policies regarding them. Issues
in question must be identified and communicated to the supplier, who will
then know which policies, provisions, or clauses will affect them. One issue
that must be identified for the suppliers is their responsibility to protect the
Postal Service against claims resulting from suppliers' use of data not
supplied by the Postal Service.
Before the Postal Service and individual supplier can openly discuss
proprietary information, a nondisclosure agreement (NDA), which protects
both parties from the loss of intellectual properties and rights, may be
necessary. Purchase/SCM Teams must work with the Legal Counsel to draft
the NDA. The NDA will require that certain information not be disclosed,
except under the terms as described in the NDA, and spells out exactly the
information that is deemed proprietary.
Pursuant to Provision 8-2: Representation of Rights in Data, technical data
that are limited rights data and restricted computer software that has been
identified must be brought to the attention of the Postal Service in the
supplier's proposal. Any subsequent supplier claim that further data or
software have been identified or developed at private expense must be
supported by clear and convincing evidence. Limited rights data and
restricted computer software that are properly identified are recognized by
the Postal Service, and related language is incorporated into the contract,
using Clause 8-17: Delivery of Limited Rights Data and Restricted Computer
Software. Once the contract is signed, limited rights data and restricted
computer software can be delivered to the Postal Service and will be
designated and recognized by a specific legend placed on them.
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