10 U.S.C. § 3771 — Rights in technical data: regulations

Page 2549 TITLE 10—ARMED FORCES § 3771 CHAPTER 275—PROPRIETARY CONTRACTOR DATA AND RIGHTS IN TECHNICAL DATA Subchapter Sec. I. Rights in Technical Data ...................... 3771 II. Validation of Proprietary Data Restric- tions ................................................... 3781 III. Other Provisions Relating to Propri- etary Contractor Data and Rights in Technical Data ................................... 3791 Editorial Notes PRIOR PROVISIONS A prior chapter 275 ‘‘PROPRIETARY CONTRACTOR DATA AND TECHNICAL DATA’’, as added by Pub. L. 115–232, div. A, title VIII, § 801(a), Aug. 13, 2018, 132 Stat. 1828, and consisting of reserved section 3771, was re- pealed by Pub. L. 116–283, div. A, title XVIII, § 1833(a)(1), Jan. 1, 2021, 134 Stat. 4225. SUBCHAPTER I—RIGHTS IN TECHNICAL DATA Sec. 3771. Rights in technical data: regulations. 3772. Rights in technical data: provisions required in contracts. 3773. Domestic business concerns: programs for re- plenishment parts. 3774. Major weapon systems and subsystems: long- term technical data needs. 3775. Definitions. § 3771. Rights in technical data: regulations (a) REGULATIONS REQUIRED.— (1) IN GENERAL.—The Secretary of Defense shall prescribe regulations to define the legiti- mate interest of the United States and of a contractor or subcontractor in technical data pertaining to an item or process. Such regula- tions shall be included in regulations of the Department of Defense prescribed as part of the Federal Acquisition Regulation. (2) OTHER RIGHTS NOT IMPAIRED.—Regula- tions prescribed under paragraph (1) may not impair— (A) any right of the United States or of any contractor or subcontractor with re- spect to patents or copyrights or any other right in technical data otherwise established by law; or (B) the right of a contractor or subcon- tractor to receive from a third party a fee or royalty for the use of technical data per- taining to an item or process developed ex- clusively at private expense by the con- tractor or subcontractor, except as other- wise specifically provided by law. (b) REQUIRED PROVISIONS.—Regulations pre- scribed under subsection (a) shall include the following provisions: (1) DEVELOPMENT EXCLUSIVELY WITH FEDERAL FUNDS.—In the case of an item or process that is developed by a contractor or subcontractor exclusively with Federal funds (other than an item or process developed under a contract or subcontract to which regulations under sec- tion 9(j)(2) of the Small Business Act (15 U.S.C. 638(j)(2)) apply), the United States shall have the unlimited right to— (A) use technical data pertaining to the item or process; or (B) release or disclose the technical data to persons outside the government or permit the use of the technical data by such per- sons. (2) DEVELOPMENT EXCLUSIVELY AT PRIVATE EXPENSE.—Except as provided in paragraphs (3), (4), and (7), in the case of an item or proc- ess that is developed by a contractor or sub- contractor exclusively at private expense, the contractor or subcontractor may restrict the right of the United States to release or dis- close technical data pertaining to the item or process to persons outside the government or permit the use of the technical data by such persons. (3) EXCEPTION TO PARAGRAPH (2).—Paragraph (2) does not apply to technical data that— (A) constitutes a correction or change to data furnished by the United States; (B) relates to form, fit, or function; (C) is necessary for operation, mainte- nance, installation, or training (other than detailed manufacturing or process data, in- cluding such data pertaining to a major sys- tem component); or (D) is otherwise publicly available or has been released or disclosed by the contractor or subcontractor without restriction on fur- ther release or disclosure. (4) EXCEPTION TO PARAGRAPH (2).—Notwith- standing paragraph (2), the United States may release or disclose technical data to persons outside the Government, or permit the use of technical data by such persons, if— (A) such release, disclosure, or use— (i) is necessary for emergency repair and overhaul; (ii) is a release, disclosure, or use of technical data pertaining to an interface between an item or process and other items or processes necessary for the seg- regation of an item or process from, or the reintegration of that item or process (or a physically or functionally equivalent item or process) with, other items or processes; or (iii) is a release or disclosure of technical data (other than detailed manufacturing or process data) to, or use of such data by, a foreign government that is in the inter- est of the United States and is required for evaluational or informational purposes; (B) such release, disclosure, or use is made subject to a prohibition that the person to whom the data is released or disclosed may not further release, disclose, or use such data; and (C) the contractor or subcontractor assert- ing the restriction is notified of such re- lease, disclosure, or use. (5) DEVELOPMENT WITH MIXED FUNDING.— (A) IN GENERAL.—Except as provided in paragraphs (6) and (7), in the case of an item or process that is developed in part with Federal funds and in part at private expense, the respective rights of the United States and of the contractor or subcontractor in technical data pertaining to such item or process shall be established as early in the acquisition process as practicable (pref- erably during contract negotiations) and Page 2550 TITLE 10—ARMED FORCES § 3771 shall be based on negotiations between the United States and the contractor, except in any case in which the Secretary of Defense determines, on the basis of criteria estab- lished in the regulations, that negotiations would not be practicable. (B) FACTORS TO BE CONSIDERED.—The estab- lishment of such rights shall be based upon consideration of all of the following factors: (i) The statement of congressional policy and objectives in section 200 of title 35, the statement of purposes in section 2(b) of the Small Business Innovation Development Act of 1982 (15 U.S.C. 638 note), and the declaration of policy in section 2 of the Small Business Act (15 U.S.C. 631). (ii) The interest of the United States in increasing competition and lowering costs by developing and locating alternative sources of supply and manufacture. (iii) The interest of the United States in encouraging contractors to develop at pri- vate expense items for use by the Govern- ment. (iv) Such other factors as the Secretary of Defense may prescribe. (6) INTERFACES DEVELOPED WITH MIXED FUND- ING.—Notwithstanding paragraph (5), the United States shall have government purpose rights in technical data pertaining to an inter- face between an item or process and other items or processes that was developed in part with Federal funds and in part at private ex- pense, except in any case in which the Sec- retary of Defense determines, on the basis of criteria established in the regulations, that negotiation of different rights in such tech- nical data would be in the best interest of the United States. (7) MODULAR SYSTEM INTERFACES DEVELOPED EXCLUSIVELY AT PRIVATE EXPENSE OR WITH MIXED FUNDING.— (A) Notwithstanding paragraphs (2) and (5), the United States shall have government purpose rights in technical data pertaining to a modular system interface developed ex- clusively at private expense or in part with Federal funds and in part at private expense and used in a modular open system approach pursuant to section 4401 of this title, except in any case in which the Secretary of De- fense determines that negotiation of dif- ferent rights in such technical data would be in the best interest of the United States. (B) Such modular system interface shall be identified in the contract solicitation and the contract. (C) For technical data pertaining to a modular system interface developed exclu- sively at private expense for which the United States asserts government purpose rights, the Secretary of Defense shall nego- tiate with the contractor the appropriate and reasonable compensation for such tech- nical data. (8) LIMITATIONS ON REQUIREMENTS RELATED TO CONTRACTOR OR SUBCONTRACTOR RIGHTS IN TECHNICAL DATA.—A contractor or subcon- tractor (or a prospective contractor or subcon- tractor) may not be required, as a condition of being responsive to a solicitation or as a con- dition for the award of a contract— (A) to sell or otherwise relinquish to the United States any rights in technical data except— (i) rights in technical data described in paragraph (1) for which a use or release re- striction has been erroneously asserted by a contractor or subcontractor; (ii) rights in technical data described in paragraph (3); or (iii) under the conditions described in paragraph (4); or (B) to refrain from offering to use, or from using, an item or process to which the con- tractor is entitled to restrict rights in data under paragraph (2). (9) ACTIONS AUTHORIZED IF NECESSARY TO DE- VELOP ALTERNATIVE SOURCES OF SUPPLY AND MANUFACTURE.—The Secretary of Defense may— (A) negotiate and enter into a contract with a contractor or subcontractor for the acquisition of rights in technical data not otherwise provided under paragraph (3) or (4), if necessary to develop alternative sources of supply and manufacture; (B) agree to restrict rights in technical data otherwise accorded to the United States under this subchapter if the United States receives a royalty-free license to use, release, or disclose the data for purposes of the United States (including purposes of competitive procurement); or (C) permit a contractor or subcontractor to license directly to a third party the use of technical data which the contractor is oth- erwise allowed to restrict, if necessary to de- velop alternative sources of supply and man- ufacture. (c) SECRETARY OF DEFENSE TO DEFINE TERMS.— The Secretary of Defense shall define the terms ‘‘developed’’, ‘‘exclusively with Federal funds’’, and ‘‘exclusively at private expense’’ in regula- tions prescribed under subsection (a). In defining such terms, the Secretary— (1) shall specify the manner in which indi- rect costs shall be treated; and (2) shall specify that amounts spent for inde- pendent research and development and bid and proposal costs shall not be considered to be Federal funds for the purposes of the defini- tions under this subsection. (Added and amended Pub. L. 116–283, div. A, title XVIII, § 1833(a)(1), (b), Jan. 1, 2021, 134 Stat. 4226.) Editorial Notes CODIFICATION The text of subsec. (a) of section 2320 of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1833(b), was based on Pub. L. 98–525, title XII, § 1216(a), Oct. 19, 1984, 98 Stat. 2595; Pub. L. 98–577, title III, § 301(b), Oct. 30, 1984, 98 Stat. 3076; Pub. L. 99–145, title IX, § 961(d)(1), Nov. 8, 1985, 99 Stat. 703; Pub. L. 99–500, § 101(c) [title X, § 953(a)], Oct. 18, 1986, 100 Stat. 1783–82, 1783–169, and Pub. L. 99–591, § 101(c) [title X, § 953(a)], Oct. 30, 1986, 100 Stat. 3341–82, 3341–169; Pub. L. 99–661, div. A, title IX, formerly title IV, § 953(a), Nov. 14, 1986, 100 Stat. 3949, renumbered title IX, Pub. Page 2551 TITLE 10—ARMED FORCES § 3771 L. 100–26, § 3(5), Apr. 21, 1987, 101 Stat. 273; Pub. L. 100–26, § 7(a)(4), Apr. 21, 1987, 101 Stat. 275; Pub. L. 100–180, div. A, title VIII, § 808(a), Dec. 4, 1987, 101 Stat. 1128; Pub. L. 101–189, div. A, title VIII, § 853(b)(2), Nov. 29, 1989, 103 Stat. 1518; Pub. L. 111–383, div. A, title VIII, § 824(b), Jan. 7, 2011, 124 Stat. 4269; Pub. L. 112–81, div. A, title VIII, § 815(a)(1), Dec. 31, 2011, 125 Stat. 1491; Pub. L. 114–328, div. A, title VIII, § 809(a), (b), (e), Dec. 23, 2016, 130 Stat. 2266, 2267; Pub. L. 116–283, div. A, title VIII, § 804(b)(2)(A)(i), Jan. 1, 2021, 134 Stat. 3738. Pub. L. 99–500, Pub. L. 99–591, and Pub. L. 99–661 generally amended section 2320(a) substantially identically; as executed, text reflected amendment by Pub. L. 99–661. AMENDMENTS 2021—Pub. L. 116–283, § 1833(b)(1), (2)(A), transferred subsec. (a) of section 2320 of this title to this section, effectively redesignated par. (1) as subsec. (a), and re- designated pars. (2) and (3) as subsecs. (b) and (c), re- spectively. Subsec. (a). Pub. L. 116–283, § 1833(b)(2)(A), (B)(i), after redesignation of par. (1) of section 2320(a) of this title as subsec. (a) of this section, inserted subsec. heading and, in existing provisions, designated first two sen- tences as par. (1) and the remainder as par. (2) and in- serted par. headings. Amendment designating ‘‘the third sentence as paragraph (2)’’ was executed by in- cluding the fourth sentence within par. (2) as well, to reflect the probable intent of Congress. Subsec. (a)(2). Pub. L. 116–283, § 1833(b)(2)(B), sub- stituted ‘‘Regulations prescribed under paragraph (1) may not’’ for ‘‘Such regulations may not’’, inserted dash after ‘‘impair’’, reorganized remainder of text into designated subpars. (A) and (B), and, at end of subpar. (A), substituted ‘‘by law; or’’ for ‘‘by law. Such regula- tions also may not impair’’. Subsec. (b). Pub. L. 116–283, § 1833(b)(3)(A), (B), after redesignation of par. (2) of section 2320(a) of this title as subsec. (b) of this section, inserted heading, sub- stituted ‘‘Regulations prescribed under subsection (a)’’ for ‘‘Such regulations’’ in introductory provisions, and redesignated subpars. (A) to (I) as pars. (1) to (9), re- spectively. Subsec. (b)(1). Pub. L. 116–283, § 1833(b)(3)(C), redesig- nated cls. (i) and (ii) as subpars. (A) and (B), respec- tively. Subsec. (b)(2). Pub. L. 116–283, § 1833(b)(3)(D), sub- stituted ‘‘paragraphs (3), (4), and (7)’’ for ‘‘subpara- graphs (C), (D), and (G)’’. Subsec. (b)(3). Pub. L. 116–283, § 1833(b)(3)(E), sub- stituted ‘‘paragraph (2)’’ for ‘‘subparagraph (b)’’ in heading and ‘‘Paragraph (2) does not’’ for ‘‘Subpara- graph (B) does not’’ in introductory provisions and re- designated cls. (i) to (iv) as subpars. (A) to (D), respec- tively. Subsec. (b)(4). Pub. L. 116–283, § 1833(b)(3)(F), sub- stituted ‘‘paragraph (2)’’ for ‘‘subparagraph (b)’’ in heading and ‘‘Notwithstanding paragraph (2)’’ for ‘‘Not- withstanding subparagraph (B)’’ in introductory provi- sions and redesignated cl. (i), its subcls. (I) to (III), cl. (ii), and cl. (iii) as subpar. (A), cls. (i) to (iii), subpar. (B), and subpar. (C), respectively. Subsec. (b)(5). Pub. L. 116–283, § 1833(b)(3)(G), in exist- ing provisions, designated first sentence as subpar. (A), inserted heading, and substituted ‘‘Except as provided in paragraphs (6) and (7),’’ for ‘‘Except as provided in subparagraphs (F) and (G),’’ and designated second sen- tence as subpar. (B), inserted heading, and realigned margin. Subsec. (b)(6). Pub. L. 116–283, § 1833(b)(3)(H), sub- stituted ‘‘paragraph (5)’’ for ‘‘subparagraph (E)’’. Subsec. (b)(7). Pub. L. 116–283, § 1833(b)(3)(I), in exist- ing provisions, designated first sentence as subpar. (A) and substituted ‘‘Notwithstanding paragraphs (2) and (5)’’ for ‘‘Notwithstanding subparagraphs (B) and (E)’’ and ‘‘section 4401’’ for ‘‘section 2446a’’ and designated second and third sentences as subpars. (B) and (C), re- spectively. Subsec. (b)(8). Pub. L. 116–283, § 1833(b)(3)(J)(i), (ii), in- serted heading and redesignated cls. (i) and (ii) as sub- pars. (A) and (B), respectively. Subsec. (b)(8)(A). Pub. L. 116–283, § 1833(b)(3)(J)(iii)–(vi), redesignated subcl. (I) as cl. (i) and substituted ‘‘paragraph (1)’’ for ‘‘subparagraph (A)’’, redesignated subcl. (II) as cl. (ii) and substituted ‘‘paragraph (3)’’ for ‘‘subparagraph (C)’’, and redesig- nated subcl. (III) as cl. (iii) and substituted ‘‘paragraph (4)’’ for ‘‘subparagraph (D)’’. Subsec. (b)(8)(B). Pub. L. 116–283, § 1833(b)(3)(J)(vii), substituted ‘‘paragraph (2)’’ for ‘‘subparagraph (B)’’. Subsec. (b)(9). Pub. L. 116–283, § 1833(b)(3)(K), inserted heading, redesignated cl. (i) as subpar. (A) and sub- stituted ‘‘paragraph (3) or (4)’’ for ‘‘subparagraph (C) or (D)’’, redesignated cl. (ii) as subpar. (B) and substituted ‘‘this subchapter’’ for ‘‘this section’’, and redesignated cl. (iii) as subpar. (C). Subsec. (c). Pub. L. 116–283, § 1833(b)(4), inserted head- ing, substituted ‘‘subsection (a)’’ for ‘‘paragraph (1)’’ and ‘‘this subsection’’ for ‘‘this paragraph’’, inserted dash after ‘‘terms, the Secretary’’, and reorganized re- mainder of text into designated pars. (1) and (2). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed im- plementation and applicability of existing law, see sec- tion 1801(d) of Pub. L. 116–283, set out as an Effective Date of 2021 Amendment note preceding section 3001 of this title. REVERSE ENGINEERING OR RE-ENGINEERING FOR PRODUCTION OF ITEMS Pub. L. 118–159, div. A, title VIII, § 882, Dec. 23, 2024, 138 Stat. 2017, provided that: ‘‘(a) REVERSE ENGINEERING OR RE-ENGINEERING PROC- ESS.—Not later than one year after the date of the en- actment of this Act [Dec. 23, 2024], the Under Secretary of Defense for Acquisition and Sustainment, in coordi- nation with each Secretary of a military department and the Director of the Defense Logistics Agency, shall establish a process to— ‘‘(1) identify items for which— ‘‘(A) technical data is not available; or ‘‘(B) rights in such technical data does not allow for manufacturing of the item; and ‘‘(2) create streamlined procedures for production of a item identified under paragraph (1) through reverse engineering or re-engineering— ‘‘(A) if production of the item may be required for point of use manufacturing or for a contested logis- tics environment (as defined in section 2926 of title 10, United States Code); ‘‘(B) if the manufacturer of the item will not meet the schedule for delivery required by the con- tracting officer to maintain weapon system readi- ness or responsiveness in the event of mobilization; or ‘‘(C) with respect to a [sic] item for which a head of the contracting activity can only acquire by en- tering into a sole source contract, if such head sub- mits to the service acquisition executive (as defined in section 101 of title 10, United States Code) a writ- ten determination that such reverse engineering or re-engineering is beneficial to sustain training or operations of the Department of Defense with re- spect to such item. ‘‘(b) ANNUAL REPORT.— ‘‘(1) IN GENERAL.—Not later than one year after the date of the enactment of this Act, and annually thereafter until December 31, 2030, the Under Sec- retary of Defense for Acquisition and Sustainment, in coordination with each Secretary of a military de- partment and the Director of the Defense Logistics Agency, shall submit to the congressional defense committees [Committees on Armed Services and Ap- propriations of the Senate and the House of Rep- resentatives] a report on the use of reverse engineer- ing or re-engineering carried out pursuant to the process required under subsection (a). Page 2552 TITLE 10—ARMED FORCES § 3772 ‘‘(2) CONTENTS.—Each report required by paragraph (1) shall include the following: ‘‘(A) A list of items produced through reverse en- gineering or re-engineering, disaggregated by ele- ment of the Department of Defense described in section 111(b) of title 10, United States Code that used the process established under subsection (a). ‘‘(B) Representative case studies of items listed under subparagraph (A), including a description of the use case of each item, the efforts used to ac- quire the technical data or technical data rights needed to manufacture the item, and the estimated cost or time savings obtained, the estimated cost or time savings obtained over an estimated time hori- zon of ten years of acquisition requirements, in- cluding the identification of recurring and non- recurring costs. ‘‘(C) Recommendations and lessons learned that may inform contracting guidance and procedures, especially regarding the creation of technical data packages and technical data rights through reverse engineering or re-engineering.’’ § 3772. Rights in technical data: provisions re- quired in contracts (a) CONTRACT PROVISIONS RELATING TO TECH- NICAL DATA.—Regulations prescribed under sec- tion 3771 of this title shall require that, when- ever practicable, a contract for supplies or serv- ices entered into by an agency named in section 3063 of this title contain appropriate provisions relating to technical data, including provi- sions— (1) defining the respective rights of the United States and the contractor or subcon- tractor (at any tier) regarding any technical data to be delivered under the contract and providing that, in the case of a contract for a commercial product, the product shall be pre- sumed to be developed at private expense un- less shown otherwise in accordance with sec- tion 3784; (2) specifying the technical data, if any, to be delivered under the contract and delivery schedules for such delivery; (3) establishing or referencing procedures for determining the acceptability of technical data to be delivered under the contract; (4) establishing separate contract line items for the technical data, if any, to be delivered under the contract; (5) to the maximum practicable extent, iden- tifying, in advance of delivery, technical data which is to be delivered with restrictions on the right of the United States to use such data; (6) requiring the contractor— (A) to revise any technical data delivered under the contract to reflect engineering de- sign changes made during the performance of the contract and affecting the form, fit, and function of the items specified in the contract; and (B) to deliver such revised technical data to an agency within a time specified in the contract; (7) establishing remedies to be available to the United States when technical data re- quired to be delivered or made available under the contract is found— (A) to be incomplete or inadequate; or (B) to not satisfy the requirements of the contract concerning technical data; (8) authorizing the head of the agency to withhold payments under the contract (or ex- ercise such other remedies as the head of the agency considers appropriate) during any pe- riod if the contractor does not meet the re- quirements of the contract pertaining to the delivery of technical data; (9) providing that, in addition to technical data that is already subject to a contract de- livery requirement, the United States may re- quire, until the date occurring six years after acceptance of the last item (other than tech- nical data) under a contract or the date of contract termination, whichever is later, the delivery of technical data that has been gen- erated in the performance of the contract, and compensate the contractor only for reasonable costs incurred for having converted and deliv- ered the data in the required form, upon a de- termination that— (A) the technical data is needed for the purpose of reprocurement, sustainment, modification, or upgrade (including through competitive means) of a major system or subsystem thereof, a weapon system or sub- system thereof, or any noncommercial prod- uct or process; and (B) the technical data— (i) pertains to an item or process devel- oped in whole or in part with Federal funds; or (ii) is described in paragraphs (4)(A)(ii), (6), and (7) of section 3771(b) of this title; and (10) providing that the United States is not foreclosed from requiring the delivery of the technical data by a failure to challenge, in ac- cordance with the requirements of section 3782 of this title, the contractor’s assertion of a use or release restriction on the technical data. (b) Nothing in this subchapter or in section 3208 of this title prohibits the Secretary of De- fense from— (1) prescribing standards for determining whether a contract entered into by the De- partment of Defense shall provide for a time to be specified in the contract after which the United States shall have the right to use (or have used) for any purpose of the United States all technical data required to be deliv- ered to the United States under the contract or providing for such a period of time (not to exceed 7 years) as a negotiation objective; (2) notwithstanding any limitation upon the license rights conveyed under section 3771 of this title, allowing a covered Government sup- port contractor access to and use of any tech- nical data delivered under a contract for the sole purpose of furnishing independent and im- partial advice or technical assistance directly to the Government in support of the Govern- ment’s management and oversight of the pro- gram or effort to which such technical data re- lates; or (3) prescribing reasonable and flexible guide- lines, including negotiation objectives, for the conduct of negotiations regarding the respec- tive rights in technical data of the United States and the contractor.