1. of XX Data Rights, Intellectual Property, Information Technology and Export Controls in Government Contracting W. Jay DeVecchio, Partner, Jenner & Block LLP ©2015 PubKLearning. All rights reserved.1 Since 1994, a statutory and regulatory preference for commercial items –FASA, 41 U.S.C. § 3307; 10 USC §2377; FAR Part 12 Particularly significant for commercial computer software –For example, GSA IT Schedule 70 = $14 Billion or 42% of all GSA buys Also, a regulatory preference for contractors’ standard commercial licenses – e.g., EULAs, TOS But a caveat for terms inconsistent with federal law. FAR 27.405-3(b); 12.212(a); DFARS 227.7202-1(a) –What clauses and what laws? –Some obvious ones: disputes, indemnity, automatic renewal, penalties. –Why care? Unenforceable against USG anyway. Agencies more recently have been wrestling with this –2013: FAR 52.232-39 “Unenforceability of Unauthorized Obligations” and FAR 52.212-4(u). –2012: GSA required submission of EULAs for review in editable Word format.

2. of XX Data Rights, Intellectual Property, Information Technology and Export Controls in Government Contracting W. Jay DeVecchio, Partner, Jenner & Block LLP As a result, GSA identified 15 principal unacceptable commercial terms, creating an internal “fail chart.” 1.Definition of contracting parties (USG & K’er); 2.Contract formation; 3.Vendor indemnity (vendor assumes control of proceedings); 4.Automatic renewals of term-limited agreements; 5.Future fees or penalties; 6.Taxes; 7.Payment terms or invoicing (late payment) 8.Automatic incorporation/deemed acceptance of third party terms; 9.State/foreign law governed contracts; 10.Equitable remedies, injunctions, binding arbitration; 11.Unilateral termination of supplier agreement by supplier; 12.Unilateral modification of supplier agreement by supplier; 13.Assignment of supplier agreement on Government contract by supplier; 14.Confidentiality of supplier agreement terms and conditions; and 15.Audits (automatic liability for payment). ©2015 PubKLearning. All rights reserved.2

3. of XX Data Rights, Intellectual Property, Information Technology and Export Controls in Government Contracting W. Jay DeVecchio, Partner, Jenner & Block LLP ©2015 PubKLearning. All rights reserved.3 On July 31, 2015, GSA issued a “Class Deviation” creating a new clause to address these – GSAR 552.232-78 “Commercial Supplier Agreements – Unenforceable Clauses.” –Also created new commercial item clause 552.212-4 by adding three new sections – (g)(2), (u) and (w) to FAR 52.212-4. Subsection “w” has 12 provisions covering the 15 areas. What’s the problem? 1.Order of precedence changed. License agreements now are subordinate to solicitation provisions and to 552.212-4. 2.552.212-4 has a number of categories that could override the license, although this is plainly contrary to the principle of using commercial terms and is contrary to FAR 52.212-4. E.g.:  Warranty ● Title● Patent Indemnity ● Definitions ● System for Award Management Contractors now may have to negotiate terms never previously applicable Complicating, not streamlining. Precedential for other agencies?