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FAR and DFARS › FAR Part 27: Patents, Data, and Copyrights › Subpart 27.3

FAR 27.306 Licensing background patent rights to third parties.

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 section says a Government contract with a small business or nonprofit organization generally cannot include a clause letting the Government force the contractor to license its non-subject inventions to third parties. The agency head can only allow such a clause by signing a written justification, after a hearing, and with specific determinations. It matters because it limits the Government's ability to require you to license your own inventions.

Applies to: Contracts with small business concerns or nonprofit organizations

What it requires

  • The agency must notify the contractor of the determination by certified or registered mail.
  • The notification must state that the contractor must bring any action for judicial review within 60 days after the notification.

Key terms: subject invention · work object · agency head · written justification · judicial review

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

The text

(a) A contract with a small business concern or nonprofit organization shall not contain a provision allowing the Government to require the licensing to third parties of inventions owned by the contractor that are not subject inventions unless the agency head has approved and signed a written justification in accordance with paragraph (b) of this section. The agency head may not delegate this authority and may exercise the authority only if it is determined that the—

(1) Use of the invention by others is necessary for the practice of a subject invention or for the use of a work object of the contract; and

(2) Action is necessary to achieve the practical application of the subject invention or work object.

(b) Any determination will be on the record after an opportunity for a hearing, and the agency shall notify the contractor of the determination by certified or registered mail. The notification shall include a statement that the contractor must bring any action for judicial review of the determination within 60 days after the notification.

← 27.305-4 Protection of invention disclosures. · 27.400 Scope of subpart. →

Rule changes for FAR Part 27

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

FAR 27.306 Licensing background patent rights to third parties · SpendQuery