FAR Part 27: Patents, Data, and Copyrights

In plain English

FAR Part 27 covers patents, data rights, and copyrights in government contracts. It explains how the government handles infringement liability, royalties, invention reporting, and rights in technical data and software. For contractors, it matters because it defines what intellectual property you may keep, what you must report, and how the government may use your data.

Key rules

• The government encourages maximum practical commercial use of inventions made under government contracts. (27.102)
• The exclusive remedy for patent or copyright infringement by the government is a suit for monetary damages in the Court of Federal Claims; no injunctive relief is available. (27.201-1)
• Contractors must report royalties anticipated or paid under government contracts, and the contracting officer may adjust or recover excessive or improper royalties. (27.202-1, 27.202-3, 27.202-4)
• Patent rights clauses are required in all solicitations and contracts for experimental, developmental, or research work. (27.303)
• The government acquires unlimited rights in data first produced under a contract, except for limited rights data, restricted computer software, and copyrighted works. (27.404-1)
• Contractors may protect qualifying limited rights data and restricted computer software by withholding it and delivering form, fit, and function data instead. (27.404-2)
• Contractors must obtain permission from the contracting officer before asserting copyright in data first produced under a contract, unless otherwise authorized. (27.404-3)
• For major systems, the clause at 52.227-21 requires contractors to declare and revise technical data assertions and allows withholding of payment for noncompliance. (27.406-3)

Who does what

In practice

• When bidding, you may need to provide royalty information if the solicitation requires it, and you should understand that the government may adjust or recover royalties later.
• During performance, you must report inventions and follow the patent rights clause; failure to do so can affect your rights and the government's rights.
• For data, you can protect limited rights data and restricted computer software by withholding it and delivering form, fit, and function data, but you must mark it properly.
• If you assert copyright in data first produced under the contract, you generally need the contracting officer's permission.

Common pitfalls

• Assuming you can copyright data first produced under the contract without obtaining the contracting officer's permission, which is generally required.
• Failing to properly mark limited rights data or restricted computer software, which could result in the government acquiring unlimited rights.
• Not reporting inventions as required by the patent rights clause, which can lead to loss of rights or other consequences.
• Ignoring royalty reporting requirements, which can result in the government reducing or recovering royalties later.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.