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Companies participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs have certain restrictions to their intellectual property rights if they receive funding from the federal government through their SBIR/STTR grant.  Companies essentially grant the federal government a royalty-free license to use their invention world-wide for government purposes. However, the government does not have the right to make money from your invention through commercialization as the company retains ownership and rights related to commercial exploitation.
 
The Bayh-Dole Act of 1980 created legislation governing licensing rights to intellectual property generated from federally funded research.  The Small Business Association released an updated Small Business Innovation Research and Small Business Technology Transfer policy directive on April 3rd, 2019.  The new policy went into effect on May 2nd, 2019 and will only affect new awards moving forward.  All awards made prior to May 2, 2019 remain under previous policies.  In particular, the new policy has important implications for Data Rights Protection. 
 
As of May 2nd, 2019, a company is now granted twenty years of certain Data Rights protections in contrast to the previous policy of only four years. The twenty-year clock begins from the date the SBIR or STTR funding agreement is awarded and the government will have only limited rights for use of computer software or associated data.  One limited right retained by the government is the ability to evaluate the technology.  This includes the right to use, reproduce, modify, display, perform, disclose or release the technical data within the government.  However, it does not include the right to commercialize the technology nor does it allow the government to disclose the technology to a third party unless that third party has entered into a non-disclosure agreement. Similar to Technical Data, the government cannot release, disclose or permit access to the computer software for commercial, manufacturing or procurement purposes without the written permission of the company unless the government has entered into a non-disclosure agreement with the third party.  After twenty years, the government then secures general governmental purpose rights to the technical data and computer software.
 
The government also receives unlimited rights in form, operations, maintenance, fit and function data, installation or training data and unmarked SBIR/STTR data during the 20-year period. The new policy provides guidance on required markings and gives the Company six months to correct any errors or marking omissions on its data. After six months the government will obtain unlimited rights to the data if the data is unmarked.  According to the SBIR: ”If proprietary information is provided in a proposal that constitutes a trade secret, proprietary commercial or financial information, or personal information or data affecting homeland security, it will be treated in confidence, to the extent permitted by law, provided that “yes” the “Proposal Contains Proprietary Information” is chosen on Proposal Cover Sheet A and the information contained on each page is clearly marked by the proposer with the term “PROPRIETARY”.  In addition to choosing “yes” for the “Proposal Contains Proprietary Information” on Cover Sheet A, each page of the proposal containing proprietary data which the proposer wishes to restrict must be marked with the following legend:
 
“Use or disclosure of the proposal data on lines specifically identified by asterisk (*) are subject to the restriction on the Cover Sheet of this proposal.”
 
If all of the information on one page is proprietary, the proposer should include the word “PROPRIETARY” in both the header and footer on that page. However, do not label the entire proposal “PROPRIETARY”. The Government assumes no liability for disclosure or use of unmarked data and may use or disclose such data for any purpose.”  No corrections or additions are allowed after the six-month period.