The Code of Federal Regulations of the United States of America

years from the date he accepts the item. When the data is delivered, payment shall be made, by equitable adjustment or otherwise, for converting the data into the prescribed form, reproducing it, and preparing it for delivery. Such payment shall not be included in the application of any incentive pricing formula.

[30 F.R. 6970, May 25, 1965]

§ 9.204 Contract clauses; special. [25 F.R. 14251, Dec. 31, 1960]

§ 9.204-1 Limitation on Government's right of publication for sale to the general public.

The paragraph set forth below may be added to the clause of § 9.203(b) when, in contracts for research, the contracting officer determines in accordance with Departmental procedures that public dissemination of the work or certain designated parts of the work specified to be delivered under contract is in the best interest of the Government and would be facilitated by the Government relinquishing its right to publish for sale or to have others publish for sale for it. This paragraph shall not be used otherwise.

() If, after final settlement of this contract, and within the period designated in the Schedule* for the purpose of this paragraph () or otherwise approved by the Contracting Officer, but in any event within a period no greater than 24 months, the Contractor publishes for sale any Technical Data which are (1) designated in the Schedule as being subject to this paragraph ( ) and (ii) delivered under this contract, the Government agrees not to publish such Data for sale or authorize others so to do. This limitation on the Government's right to publish for sale any such Data so published by the Contractor shall continue as long as the Data are protected by copyright. As to all such Data not so published by the Contractor, this paragraph shall be of no force or effect.

[30 F.R. 6972, May 25, 1965] § 9.204-2

tures.

Production of motion pic

RIGHTS IN DATA (JAN. 1958)

(a) The term "Subject Data” as used herein includes writings, sound recordings, pictorial reproductions, drawings or other graphical representations, and works of any similar nature (whether or not copyrighted) which are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and other information incidental to contract administration.

(b) All Subject Data first produced in the performance of this contract shall be the sole property of the Government. The Contractor agrees not to assert any rights at common law or equity and not to establish any claim to statutory copyright in such Data. The Contractor shall not publish or reproduce such Data in whole or in part or in any manner or form, nor authorize others so to do, without the written consent of the Government until such time as the Government may have released such Data to the public.

(c) The Contractor agrees to grant and does hereby grant to the Government and to its officers, agents, and employees, acting within the scope of their official duties, a royalty-free, nonexclusive, and irrevocable Ilcense throughout the world (1) to publish, translate, reproduce, deliver, perform, use, and dispose of, in any manner, any and all Data not first produced or composed in the performance of this contract but which is incorporated in the work furnished under this contract; and (ii) to authorize others so to do.

(d) The Contractor shall indemnify and save and hold harmless the Government, its officers, agents and employees acting within the scope of their official duties against any liability, including costs and expenses, (1) for violation of proprietary rights, copyright or right of privacy, arising out of the publication, translation, reproduction, delivery, performance, use or disposition of any Data furnished under this contract, or (11) based upon any libelous or other unlawful matter contained in such Data.

(e) Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any license or other right otherwise granted to the Government under any patent.

(f) Paragraphs (c) and (d) above are not applicable to material furnished to the Contractor by the Government and incorporated in the work furnished under the contract: Provided, Such incorporated material is identified by the Contractor at the time of delivery of such work.

[25 F.R. 14251, Dec. 31, 1960]

§ 9.204-3 Histories and other works.

The contract clause set forth in § 9.204-2 is suggested for use in contracts for

(a) Histories of the respective Departments or services or units thereof;

(b) Works pertaining to recruiting, morale, training or career guidance;

(d) Works pertaining to the instruction or guidance of Government officers and employees in the discharge of their official duties.

[25 F.R. 14251, Dec. 31, 1960]

§ 9.205 Contracts for acquisition of existing works.

[25 F.R. 14251, Dec. 31, 1960]

§ 9.205-1 Off-the-shelf purchase of books and similar items.

Notwithstanding the instructions of any other sections in this subpart, no contract clause contained in this subpart need be included in contracts for the separate, sole procurement of data, other than motion pictures, in the exact form in which such material exists prior to the initiation of a request for purchase (such as the off-the-shelf purchases of existing products) unless the right to reproduce such data is an objective of the contract.

[25 F.R. 14251, Dec. 31, 1960] § 9.205-2

Contracts for existing motion

pictures.

Contracts for the procurement of existing motion pictures or for the modification of existing motion pictures shall be made in accordance with Departmental procedures.

[25 FR. 14251, Dec. 31, 1960]

§ 9.206 Contracts to be performed outside the United States.

(a) Except as otherwise provided in § 9.204-2, § 9.204-3, or § 9.205, the clause set forth below shall be included in all contracts under which (1) technical information including reports, drawings, blueprints or other data is specified to be delivered to the Government, and (2) the work is to be performed outside the United States, its Territories, its possessions, or Puerto Rico, regardless of the place of delivery.

TECHNICAL INFORMATION (OCT. 1958)

The Government may duplicate, use, and disclose in any manner for its Government purposes, including delivery to other governments for the furtherance of mutual defense of the United States Government and such other governments, all or any part of the technical information including reports, drawings, blueprints, and other data specified to be delivered by the Contractor to the Government under this contract.

Timely delivery of required data is particularly important for competitive procurement of follow-on quantities of the contract items and of items broken out from an assembly or equipment. The clauses set forth in § 9.207-2 are designed to insure timely delivery of complete and current data. The clauses provide for a withholding of ten percent (10%) of the contract price, but the contracting officer may specify a lesser amount in the schedule if circumstances warrant. To insure effective enforcement of the clause, a case-by-case determination shall be made by the contracting officer after considering all pertinent factors, including whether the failure to make timely delivery, in accordance with the delivery schedule as originally provided or as modified, arises out of causes beyond the control and without the fault or negligence of the contractor.

[27 F.R. 6136, June 29, 1962] § 9.207-2

Clauses.

(a) The following clause shall be inserted in all fixed-price contracts (except those not exceeding $10,000 or with educational institutions) containing the clause set forth in § 9.203 (b).

DATA WITHHOLDING OF PAYMENT
(APRIL 1965)

timely delivery or to deliver data without deficiencies arises out of causes beyond the control and without the fault or negligence of the Contractor within the meaning of the clause hereof entitled "Default." The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract.

(b) The following clause shall be used in all cost-reimbursement type contracts (except contracts with educational institutions) containing the clause set forth in § 9.203(b).

DATA-WITHHOLDING OF PAYMENT

(APRIL 1965)

If "Technical Data" (as defined in the clause of this contract entitled "Rights in Technical Data"), or any part thereof, is not delivered within the time specified by this contract or is deficient upon delivery (including having restrictive markings not specifically authorized by the contract), the Contracting Officer may, until such data is delivered or deficiencies are corrected, withhold payment due the Contractor on account of allowable costs and fixed fee, of ten percent (10%) of the contract price, unless a lesser withholding is specified in the schedule. Payments shall not be withheld nor any other action taken pursuant to this clause where the Contractor's failure to make timely delivery or to deliver data without deficiencies arises out of causes beyond the control and without the fault or negligence of the Contractor within the meaning of the clause hereof entitled "Excusable Delays." The withholding of any amount of subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract.

[30 F.R. 6972, May 25, 1965]

Subpart C-Foreign License and Tech

nical Assistance Agreements SOURCE: The provisions of this Subpart C appear at 25 F.R. 14252, Dec. 31, 1960, except as otherwise noted.

ernment, herein referred to as a "second source," foreign patent rights; technical assistance in the form of data, know-how, trained personnel of the primary source, instruction and guidance of the personnel of the second source, jigs, dies, fixtures, or other manufacturing aids; and such other assistance, information, rights, or licenses as are needed to enable the second source to produce particular supplies or perform particular services. Agreements calling for one or more of the foregoing may be entered into between the primary source and the Government, a foreign government, or a foreign concern. The consideration for providing such foreign licenses and technical assistance may be in the form of a lump sum payment, or payments for each item manufactured by the second source, or both, an agreement to exchange data and patent rights on improvements made to the article or service, capital stock transactions, or any combination of these. The primary source's bases for computing such consideration may include actual cost, charges for the use of patents, data, or know-how reflecting the primary source's investment in development and engineering and production techniques, and the primary source's "price" for setting up a second source. Such agreements often refer to the compensation to be paid as a royalty or license fee whether or not patent rights are involved.

It is Government policy not to pay in connection with its contracts, and not to be paid in connection with contracts made with funds derived through the Mutual Security Program or otherwise through the United States, charges for use of patents in which it holds a royaltyfree license or charges for data which it has a right to use and disclose to others, or which is in the public domain, or which the Government has acquired without restriction upon its use and disclosure to others. This policy applies to foreign license and technical assistance agreements, first, in negotiating contract prices for foreign license and technical assistance contracts (§ 9.302) or supply contracts with second sources (§ 9.303), and second, in commenting on such agreements when they are referred to the Department of Defense by the Department of State pursuant to section 414 of the Mutual Security Act of 1954 and the

International Traffic in Arms Regulations (§ 9.304).

§ 9.302 Foreign license and technical assistance contracts between the Government and domestic concerns.

(a) Contracts between the Government and a primary source to provide technical assistance or patent rights to a second source for the manufacture of supplies or performance of services will, to the extent practicable, specify the rights in patents and data and any other rights to be supplied to the second source. Each contract shall provide in effect that, in connection with any separate agreement between the primary source (or any of its subcontractors) and the second source for patent rights or technical assistance relating to the articles or services involved in the contract, that: (1) the primary source (and its subcontractors) will not make, on account of any purchases by the Government or by others with funds derived through the Mutual Security Program or otherwise through the Government, any charge to the second source (i) for royalties or amortization for patents or inventions in which the Government holds a royaltyfree license, or (ii) for data which the Government has a right to possess, use, and disclose to others, or (iii) for any technical assistance provided to the second source for which the Government has paid under a contract between the Government and the primary source;

and

(2) such separate agreement between the primary and second sources will conform to the requirements of the International Traffic in Arms Regulations (§ 9.304).

(b) The following factors, among others, shall be considered in negotiating the price to be paid the primary source under contracts within paragraph (a) of this section.

(1) The actual cost of providing data, personnel, manufacturing aids, samples, spare parts, etc.;

(2) The extent to which the Government has contributed to the development of the supplies or services, and to the methods of manufacture or performance, through past contracts for research and development or for manufacture of the supplies or performance of the services; and

(3) The Government's patent rights and rights in data relating to the sup

plies or services and to the methods of manufacture or of performance.

§ 9.303

Supply contracts between the government and second sources.

In negotiating contract prices with a second source, including the redetermination of contract prices, or in determining the allowability of costs under a cost-reimbursement type contract with a second source, the contracting officer:

(a) Shall obtain from the second source a detailed statement of royalties, license fees, or other compensation paid or to be paid to a primary source (or any of his subcontractors) for patent rights, rights in data, and other technical assistance provided to the second source, including identification and description of such patents, data, and technical assistance; and

(b) Shall not accept or allow charges which in effect are (1) for royalties or amortization for patents or inventions in which the Government holds a royaltyfree license, or (2) for data which the Government has a right to possess, use, and disclose to others, or (3) for any technical assistance provided to the second source for which the Government has paid under a contract between the Government and a primary source. § 9.304 Foreign license and technical assistance agreements between domestic concern and foreign govern

ment or concern.

§ 9.304-1 International Traffic in Arms

Regulations.

Pursuant to Section 414 of the Mutual Security Act of 1954, as amended (22 U.S.C. 1934), the Department of State controls the exportation of data relating to articles designated in the United States Munitions List as arms, ammunition, or munitions of war. (The Munitions List and pertinent procedures are set forth in the International Traffic in Arms Regulations, 22 CFR 121 et seq.) Before authorizing such exportation, the Department of State generally requests comments from the Department of Defense. Each Military Department will, on request of the Office of the Assistant Secretary of Defense (International Security Affairs), submit comments thereon as the basis for a Department of Defense reply to the Department of State. Such comments will be prepared in the light of the following excerpt from

124.04 Required provisions in agreements. (a) Manufacturing license or technical assistance agreements should define in precise terms the following:

(1) The equipment and technology involved;

(2) The scope of the information to be furnished;

(3) The period of duration of the agreement;

(4) Statement of ownership of equipment and special tools involved which would be made available in connection with the agreement. In lieu of inclusion as an integral part of the agreement, the applicant may submit this information in the form of an attachment or enclosure to the agreement submitted for review.

(b) (1) It is the policy of the United States Government not to pay or allow to be paid in connection with purchases made with Mutual Security Program funds, a charge for patent rights in which it holds a royalty-free license, or for technical data which it has a right to use and disclose to others for purposes of the Mutual Security Program, or which are in the public domain, or with respect to which it has been placed in possession without restriction upon their use and disclosure to others. Reasonable charges for reproduction, handling, mailing, and other similar administrative costs do not fall within this policy.

(2) Pursuant to the above policy (subparagraph (1) of this paragraph) agreements shall be written in such a way as to provide that (1) purchases of items by or for the United States Government, or with funds derived through the Mutual Security Program, will not include a charge (a) for technical data in the possession of the United States Government, or in which the United States Government has a right to possession, and regarding which there is no prohibition against use by the United States Government and disclosure to others and (b) for royalties or amortization for patents or inventions in which the United States Government holds a royalty-free license; and (11) the license rights transferred by such agreements will be subject to existing rights of the United States Government. [27 F.R. 8874, Sept. 6, 1962]

§ 9.304-2 Review of agreements.

(a) In reviewing foreign license and technical assistance agreements between domestic concerns and foreign governments or concerns, the Military Department concerned shall, insofar as its interests are involved, indicate whether the agreement meets the requirements of § 124.04 of the International Traffic in Arms Regulations (22 CFR 124.3) (§ 9.304-1) or in what respects it is

deficient. Paragraphs (b) through (g) of this section provide general guidance for such review.

(b) Where it is reasonably anticipated that the Government will purchase from the second source the supplies and services involved in the agreement or that Mutual Security Program funds will be provided for the purchase of the supplies or services:

(1) It may suffice to fulfill the requirements of § 124.04 (b) (22 CFR 124.3), quoted in § 9.304-1, so far as the Department of Defense is concerned, if:

(i) The agreement is so written that: (a) The second source is required to advise the primary source when it has knowledge of any purchase made by or to be made from it by or for the Government or with funds derived through the Mutual Security Program or otherwise through the Government; and

(b) The second source agrees in the event of any such purchase to reflect in the purchase price of the article or service any reduction in the charges specified in the agreement, which is made by the primary source in respect to such purchase; and

(ii) The primary source agrees with the Government that upon advice to him from the second source, or from the Government or otherwise, as to any such purchase or prospective purchase, he will negotiate with the Department concerned an appropriate reduction in his charges to the second source in recognition of any Government rights in patents or data.

(2) If the agreement provides that no charge is being made to the second source for data or patent rights in which the Government has rights, or that no charge is being made to the extent of the Government's rights, the Department should:

(i) Before indicating its approval, evaluate the acceptability of such provision, or

(ii) Explicitly condition its approval on the right to evaluate the acceptability of such provision at a later appropriate time.

(c) Where it is reasonably anticipated that the Department will procure from the second source supplies or services involved in the agreement, or that Mutual Security Program funds will be provided for the procurement of the supplies or services:

(1) If the agreement specifies a reduction in charges thereunder, with

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