On April 3, 2019, the Small Business Association (SBA) released a revised Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program policy directive, which went into effect May 2, 2019 (the “New Policy”).  This New Policy made important and drastic changes to Data Rights protections afforded to SBIR/STTR awarded small business companies.  Government contractors should understand these major changes and consider the impact on company operations related to commercialization of intellectual property developed with government funding.

Old Policy – Four Years Plus Extensions

Prior to this New Policy, a small business (“Company”) had four years, from the date of deliverables, of Data Rights protections that could be continuously renewed/extended.  During this time, the government was not able to use, modify, reproduce, release, perform, display or disclose any Data or Computer Software that was part of the Company’s research and development under a SBIR or STTR program.  After the four years had ended (unless extended/renewed), the government would be granted a royalty-free license to use the Data or Computer Software, as well as authorize other third parties to use the Data or Computer Software on the government’s behalf for government purposes. Further, the government would be relieved of all prohibitions on disclosure and would assume no liability for the unauthorized use of such Data or Computer Software by third parties.  Prior to the New Policy, the government was not authorized any right or use to the Data or Computer Software during the four-year period (or during any extended/renewed period). However, the government was granted Unlimited Rights to the Data or Computer Software at the end of the protection period.

New Policy – 20 Years with No Extensions

Under the New Policy, a Company now has 20 years, from the date of award of an SBIR or STTR funding agreement, of certain Data Rights protections.  During this time, the government only has limited rights in its use of the Data or Computer Software.  The major right is that the government has the ability to properly evaluate the technology.  After the protection period, rather than obtaining Unlimited Rights under the old policy, the government now only obtains Government Purpose Rights to the Data and Computer Software.  However, there are nuances associated with the data rights.

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