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FAR and DFARS › DFARS Part 252: Solicitation Provisions and Contract Clauses › Subpart 252.2

DFARS 252.227-7002 Readjustment of payments.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause lets the Government get the benefit of any more favorable royalty terms you later grant to another U.S. licensee under substantially the same patents, and it ties your royalty obligation to court decisions on patent validity. It matters because you must notify the Contracting Officer promptly of such more favorable terms and may have to adjust royalties accordingly.

Applies to: Contractors under patent releases, license agreements, and assignments containing this clause

What it requires

  • Promptly notify the Contracting Officer in writing if you grant a license in the United States under substantially the same patents and acts on royalty terms more favorable than those in this contract

Key terms: royalty terms · licensee · Contracting Officer · court of competent jurisdiction · final decision on appeal

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As prescribed at 227.7009-2(b), insert the following clause in patent releases, license agreements, and assignments:

Readjustment of Payments (SEP 2019)

(a) If any license, under substantially the same patents and authorizing substantially the same acts which are authorized under this contract, has been or shall hereafter be granted within the United States, on royalty terms which are more favorable to the licensee than those contained herein, the Government shall be entitled to the benefit of such more favorable terms with respect to all royalties accruing under this contract after the date such more favorable terms become effective, and the Contractor shall promptly notify the Contracting Officer in writing of the granting of such more favorable terms.

(b) In the event any claim of any patent hereby licensed is construed or held invalid by decision of a court of competent jurisdiction, the requirement to pay royalties under this contract insofar as its arises solely by reason of such claim, and any other claim not materially different therefrom, shall be interpreted in conformity with the court's decision as to the scope of validity of such claims; Provided, however, that in the event such decision is modified or reversed on appeal, the requirement to pay royalties under this contract shall be interpreted in conformity with the final decision rendered on such appeal.

(End of clause)

Sections it refers to

Sections that refer to it

← 252.227-7001 Release of past infringement. · 252.227-7003 Termination. →

Rule changes for DFARS Part 252

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 252.227-7002 Readjustment of payments · SpendQuery