When doing business with the Department of Defense (DOD), it is imperative that contractors protect their intellectual property (IP) and understand DOD’s data rights regime under the Defense Federal Acquisition Regulation Supplement (DFARS). Fortunately, the DOD released its Intellectual Property Guidebook (Guidebook) in May 2025, which gives contractors critical insight into how DOD handles IP and data rights in government contracts. This blog, the second in PilieroMazza’s series, takes a closer look at the Guidebook’s fundamental IP and data rights concepts, such as the standard data rights under the DFARS and how the funding source for the development of the IP affects data rights. Visit this link to access Part 1 in the series, discussing an overview of the Guidebook.
Standard DFARS Data Rights
The government rarely takes ownership of contractor IP and instead receives a license. This license, referred to as “Data Rights,” describes the government’s rights in copyrights and trade secrets, but does not cover patent or trademark rights. Although the scope of the license will vary, it generally defines the government’s right to use, reproduce, modify, release, perform, display, or disclose a contractor’s technical data (TD) or computer software (CS). The scope of the government’s Data Rights depends on: (i) whether the IP is TD or CS; (ii) whether such TD or CS is commercial or non-commercial; and (iii) the funding source.
Because certain Data Rights might only apply to TD and not CS, or vice versa, it is important to first understand how each of these terms are defined. TD means recorded information—regardless of its form or recording method—of a scientific nature (including CS documentation (CSD)). TD does not include CS or data; financial, administrative, cost or pricing, or management information; or information incidental to contract administration.[1] CS includes computer programs, source code, source code listings, object code listings, design details, algorithms, processes, flow charts, formulae, and related material that enable the software to be reproduced, recreated, or recompiled.[2] CS does not include computer databases or CSD.
With those definitions in mind, the DFARS addresses the following Standard Data Rights:
- Unlimited Rights. Unlimited Rights apply to non-commercial TD and non-commercial CS and allow the government to use, modify, reproduce, perform, display, release, or disclose the data in any manner—and for any purpose whatsoever—and to have or authorize others to do so. The government generally receives Unlimited Rights in non-commercial TD and non-commercial CS developed exclusively with government funds and specific categories of data such as Operations, Maintenance, Installation, and Training (OMIT) data (other than Detailed Manufacturing or Process Data (DMPD)) and Form, Fit, and Function (FFF) data, regardless of funding source.
- Government Purpose Rights. Government Purpose Rights apply to non-commercial TD and non-commercial CS and allow the government to reproduce, modify, perform, display, use, disclose, or release the data for government purposes[3] without restriction, but the data cannot be released for any commercial purpose. For example, if the government possesses Government Purpose Rights, the government can share your TD and CS in conjunction with a competitive procurement. Notably, Government Purpose Rights typically expire five years after contract execution unless another time is negotiated in the contract, at which point, they revert to Unlimited Rights. The government generally receives Government Purpose Rights in non-commercial TD and non-commercial CS developed with mixed funding.
- Limited Rights. Limited Rights are only applicable to non-commercial TD and allow the government to use, modify, reproduce, release, perform, display, or disclose TD, in whole or in part, within the government and can only release the TD outside the government in limited circumstances. The government may not use the TD to manufacture additional quantities of an item; however, it may share the data with a “Covered Government Support Contractor” as defined in DFARS 252.227-7013 and -7014. The government generally receives Limited Rights in non-commercial TD developed exclusively at private expense.
- Restricted Rights. Restricted Rights are only applicable to non-commercial CS. Under a Restricted Rights license, the government may only run the software on one computer at a time and may make only the minimum copies needed for backup.[4] The software may not be released outside of the government except in limited circumstances, and only after the government provided notice to the software owner. As with Limited Rights, the government may share the CS with “Covered Government Support Contractors.” The government generally receives Restricted Rights in non-commercial CS developed exclusively at private expense.
- Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Data Rights. SBIR/STTR Data Rights apply to non-commercial TD and non-commercial CS. SBIR/STTR Data Rights are specific to a research and development effort awarded as a SBIR/STTR contract and essentially means that the government receives Limited Rights for TD and Restricted Rights for CS developed under a SBIR/STTR contract for the SBIR/STTR protection period. This protection period is twenty (20) years from the date of award and is not extendable by subsequent contracts. SBIR/STTR Data Rights become Government Purpose Rights once the protection period ends.
- Specifically or Specially Negotiated License Rights (SNLR). SNLR Data Rights is a catch-all allowing negotiated rights when the standard DFARS Data Rights do not meet the government’s needs, or if industry can offer other considerations that might result in the government being willing to accept lesser rights. However, the government may not accept lesser rights than Limited Rights in TD or Restricted Rights in CS. Any rights negotiated by the parties must be set forth in a written license agreement, which needs to be incorporated into the contract.
- Unrestricted Rights. The government receives Unrestricted Rights, that is, the unrestricted right to use, modify, reproduce, release, perform, display, or disclose commercial TD and permit others to do so for specific types of data such as FFF or OMIT data.[5] Notably, Unrestricted Rights only apply to commercial TD, whereas Unlimited Rights apply to non-commercial TD.
- Commercial Data Rights. Except for specific types of data such as FFF or OMIT data, the government receives Commercial Data Rights, that is, the right to use, modify, reproduce, release, perform, display, or disclose commercial TD (but not commercial CS or CSD) within the government only.[6] The government may not use the commercial TD to manufacture additional quantities of the commercial products, and it may not release, perform, display, disclose, or authorize use of the TD outside the government without the contractor’s written permission, except when necessary for emergency repair or overhaul of the commercial products, or for performance of work by a Covered Government Support Contractor, subject to a Non-Disclosure Agreement (NDA).[7]
Lastly, the DFARS does not address commercial CS or CSD, and there is no standard Data Rights for either. The DOD’s default policy is that commercial CS or commercial CSD “shall be acquired under the licenses customarily provided to the public unless such licenses are inconsistent with Federal procurement law or do not otherwise satisfy user needs.”[8] As such, when selling commercial CS to the government, you should use your customary commercial End User Licensing Agreement (EULA) or similar software licensing agreement or terms of use as a starting point for negotiations. Oftentimes, the government will include DFARS 252.227-7014 in your contract, even though the procurement is for commercial CS. In this scenario, you should remind your Contracting Officer that DFARS 252.227-7014 is not applicable, and provide them with your customary commercial EULA, software license, or terms of use instead.
Funding Source Impact on Type of Data Rights
Three basic funding scenarios determine what Data Rights the government receives:
- developed exclusively at private expense (i.e., industry as the sole developer/investor of IP);
- developed exclusively with government funds (i.e., the government is the sole developer/investor of IP); and
- developed with mixed funding (i.e., a joint development/investment arrangement between the contractor and the government).
The government receives Unlimited Rights when it exclusively funds the development of non-commercial TD or non-commercial CS. Additionally, the government receives Unlimited Rights in special categories of data such as OMIT (other than DMPD), FFF, and CSD, regardless of funding source. The government receives Government Purpose Rights when the non-commercial TD or non-commercial CS is developed using mixed funding. Where the non-commercial TD or non-commercial CS was developed exclusively with private funds, the government receives Limited Rights in the TD and Restricted Rights in the CS.
It is important to note that the government must order and receive the required deliverables to exercise its rights in that data. Even if the government has Unlimited Rights in a certain piece of TD, if the TD was not required to be delivered under the contract, the government cannot exercise its rights over that TD. Lastly, some procurement instruments, like Other Transaction Agreements (OTAs), do not automatically grant Data Rights under these funding rules, thus, the Data Rights need to be specifically negotiated and stated in the agreement.
Conclusion
Because of the technical nature and highly fact dependent inquiry, determining what Data Rights the government receives in TD or CS can be complex. Thankfully, the Guidebook offers comprehensive insights and a behind-the-scenes look at how DOD handles Data Rights and the acquisition of IP. Stay tuned for Part 3 of this blog series, where PilieroMazza will discuss the doctrine of segregability and modular licensing, as well as special categories of data such as OMIT data, FFF data, and DMPD.
If you have questions regarding data rights, the Guidebook, or intellectual property, please contact Cy Alba, Jacqueline Unger, Daniel Figuenick, Abigail Finan, or another member of PilieroMazza’s Government Contracts or Intellectual Property & Technology Rights practice groups.[9]
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If you’re seeking practical insights to gain a competitive edge by understanding the government’s compliance requirements, tune into PilieroMazza’s podcasts: GovCon Live!, Clocking in with PilieroMazza, and Ex Rel. Radio.
[1] See DFARS 252.227-7013.
[2] See DFARS 252.227-7014.
[3] “Government purpose” means any activity in which the government is a party, including cooperative agreements with international or multi-national defense organizations, or sales or transfers by the government to foreign governments or international organizations. Government purposes include competitive procurement, but do not include the rights to use, modify, reproduce, release, perform, display, or disclose TD, CS, or CS documentation for commercial purposes or authorize others to do so. See DFARS 252.227-7013 -7014.
[4] See DFARS 252.227-7014(a) for further information regarding what the government may do with non-commercial CS under a Restricted Rights license.
[5] See DFARS 252.227-7015(c)(1).
[6] See DFARS 252.227-7015(c)(2).
[7] See DFARS 252.227-7015(c)(2)-(3).
[8] See DFARS 227.7202-1.
[9] Special thanks to Lauren Aguilar, a paralegal in PilieroMazza’s Government Contracts Group, who assisted with this blog.
