The OA Guide: Implementing a New Paradigm in the Allocation of Rights in Data and Software?

2 Solidarity on the Fundamentals There is (complete) agreement on the fundamentals: There should be real, sustained, full and open competition; The Government should acquire only the technical data, and the rights in that data, necessary to satisfy agency needs The Government should identify both the minimum data rights it needs and properly establish delivery rights to obtain such data; Means use of carefully written Contract Data Requirements Lists (“CDRLs”), Statements of Work (“SOWs”), and Data Item Descriptions (“DIDs”) and use of Contract Line Item pricing for data rights and data deliverables; Offerors should compete against the identified minimum data rights and data deliverables established in the competition; Offerors should price the data rights and data deliverables; The “best value”, all factors considered, should win. May include proprietary architecture and proprietary IP

3 Policy Remains Unchanged The Government’s policy is to acquire only the technical data, and the rights in that data, necessary to satisfy agency needs. DFARS (a).

4 Understanding the Problem The GAO Reports (like GAO Report ) and similar critical reviews are correct: there has been a failure, perhaps systematic, by the Army and the Air Force to obtain the necessary data. Also correct that early decisions made on technical data rights during system acquisition have consequences, to include being a primary reason for the subsequently encountered limitations on the ability to obtain necessary. The solution is in the diligent and skillful use of the existing policies and schemes for the allocation of rights, and specification of the delivery of data, and not in a wholesale shift away from the fundamentals.¶

5 DoD Already Has Substantial Rights in Data Unlimited Rights in: 1.Data pertaining to an item, component, or process which has been or will be developed exclusively with Government funds; 2.Studies, analyses, test data, or similar data produced in the performance of a contract when specified as an element of performance; 3.Created exclusively with Government funds in the performance of a contract that does not require the development, manufacture, construction or production of items, components or processes; 4. Form, fit and function data;

6 DoD Already Has Substantial Rights (Unlimited Rights Cont’d) 5.Necessary for installation, operation, maintenance, or training purposes (other than detailed manufacturing/process data); 6.Corrections or changes to technical data furnished to the contractor by the Government; 7.Publicly available or has been released or disclosed by the contractor or subcontractor without restrictions on further use, release or disclosure other than a release or disclosure resulting from the sale, transfer or other assignment of interest in software to another party or the sale or transfer of some or all of a business entity or its assets to another party;

7 DoD Already Has Substantial Rights (More Unlimited Rights) 8.Data in which the Government has obtained unlimited rights under another Government contract or as a result of negotiations; or 9.Government Purpose License Rights or limited rights or restrictive conditions has/have expired; or Government purpose license rights and K’s exclusive right to use for commercial purposes has expired. DFARS (a)

8 DoD Has Substantial Rights in Commercial Items The Government acquires the tech data customarily provided to the public, except it always obtains Unlimited Rights in: (i) form, fit and function data; (ii) data required for repair or maintenance; and (iii) data that describes mods to a commercial item made at Government expense to meet requirements of a Government solicitation. DFARS (a)

9 Several Successive Years of Change Have Added to DoD’s Rights The Major Systems Rule and the shift of the presumption of developed at private expense Expansion of Limited Rights to Include Access for Support Contractors FY 2010: § 821  Support contractor access to data. FY 2011: § 801  Litigation support contractor access. FY 2012: § 802  Litigation support contractor additional access. Significant Expansion in NDAA for FY 2012 Sec. 815 Deferred Ordering

10 At What Price Open Architecture? Segregability Promotes and Enhances Innovation (and OA) “Contractors may assert limited rights in a segregable sub-item, sub-component, or portion of a process which otherwise qualifies for limited rights under the [ clause].” DFARS (b). and “Private expense determinations should be made at the lowest practicable level.” DFARS (a)(8). Statutory Preference for Commercial Items at All Tiers. FAR Part (c). 10 U.S.C. 2320(a)(2)(F)(Cannot require relinquishing of rights). Applies all lower tiers, for example, DFARS (k)(1),(2) and (4). Will Offerors believe/fear their core data and software will be “freely” available to competitors? Will DoD end up with a collection of “black boxes”? With the doctrine of segregability, will the challenge be overcome, or greater? The case of Software

11 The Statutory Ground Rule 10 U.S.C. 2320(a)(2)(F): A [prospective] contractor or subcontractor... may not be required, as a condition of being responsive to a solicitation or as a condition for the award of a contract— ◦ (i) to sell or otherwise relinquish to the United States any rights in technical data except—  (I) rights in technical data described in subparagraph (A) for which a use or release restriction has been erroneously asserted... ;  (II) rights in technical data described in subparagraph (C); or  (III) under the conditions described in subparagraph (D); or ◦ (ii) to refrain from offering to use, or from using, an item or process to which the contractor is entitled to restrict rights in data under subparagraph (B). DFARS: (c) & (d), (c) & (d)

12 The Silver Bullet More skillful use of existing law and regulations Early and specific identification of data rights requirements Early and specific identification of data rights deliverables Early and correct Identification of Data to be Delivered with other thean Unlimited Rights Better Use of Commercial Items Follower-Leader Realistic expectations regarding the costs of data Reduce risk – and the perception of risk For the Government For Offerors/Contractors in their IP

13 Legal and Regulatory Developments Questions?