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

DFARS 252.227-7008 Computation of royalties.

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 sets out how royalties are computed under patent releases, license agreements, and assignments. It states that royalties accrue to the Contractor on articles or materials that use the licensed inventions, at a percentage of the net selling price or a fixed amount per item, depending on whether the Government manufactures them or a cost-reimbursement contractor acquires or makes them. For items made by the Department, 'net selling price' means only direct labor and materials, with no overhead or supervision.

Applies to: Contractors under patent releases, license agreements, and assignments with the Department of ____________

Key terms: royalties · net selling price · cost-reimbursement contract · fixed price contract · unexpired United States patent

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

The text

As prescribed at 227.7009-4(c), insert the following clause in patent releases, license agreements, and assignments:

Computation of Royalties (AUG 1984)

Subject to the conditions hereinafter stated, royalties shall accrue to the Contractor under this agreement on all articles or materials embodying, or manufactured by the use of, any or all inventions claimed under any unexpired United States patent licensed herein, upon acceptance thereof by the Department of ____________, at the rate of ________ percent of the net selling price of such articles or materials (amount) per (name of item) * whether manufactured by the Government or procured under a fixed price contract, and at the rate of (amount) per (name of item) acquired or manufactured by a Contractor performing under a cost-reimbursement contract. With respect to such articles or materials made by the Department of ____________, “net selling price,” as used in this paragraph, means the actual cost of direct labor and materials without allowance for overhead and supervision.

* Use bracketed matter as appropriate.

(End of clause)

Sections it refers to

  • 227.7009-4 Additional clauses—contracts providing for payment of a running royalty.

Sections that refer to it

  • 227.7009-4 Additional clauses—contracts providing for payment of a running royalty.

← 252.227-7007 License term—running royalty. · 252.227-7009 Reporting and payment of royalties. →

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 252.227-7008 Computation of royalties · SpendQuery