# AFARS PART 5127

Subpart 5127.2 -- Patents

- 5127.203 -- Patent indemnification of Government by contractor.

- 5127.203-6 -- Clause for Government waiver of indemnity.

- 5127.205 -- Adjustment of royalties.

Subpart 5127.3 -- Patent Rights Under Government Contracts

- 5127.303 -- Contract clauses.
- 5127.304 -- Procedures.

Subpart 5127.6 -- Foreign License and Technical Assistance Agreements

- 5127.675 -- Foreign license and technical assistance agreements between a domestic concern and a foreign government or concern.

- 5127.675-2 -- Review of agreements.

Subpart 5127.70 -- Infringement Claims, Licenses, and Assignments

- 5127.7004 -- Requirements for filing an administrative claim for patent infringement.
- 5127.7006 -- Investigation and administrative disposition of claims.
- 5127.7011 -- Procurement of rights in inventions, patents, and copyrights.

AFARS -- Part 5127
Patents, Data, and Copyrights

Subpart 5127.2 -- Patents

5127.203 -- Patent indemnification of Government by contractor.

5127.203-6 -- Clause for Government waiver of indemnity.

Approval to exempt specific United States patents from the patent indemnity clause must be obtained from the Chief, Regulatory Law and Intellectual Property Law Division, Office of the Judge Advocate General, Department of the Army, Attn DAJA-IP, 901 N. Stuart Street, Arlington, VA 22203-1837. However, except that approval may be given by the Commander, U.S. Army Materiel Command (AMC) and designees having Patent Counsel.

5127.205 -- Adjustment of royalties.

(a) The office having cognizance of patent matters must report the results of any action taken in compliance with FAR 27.205 to the Chief, Regulatory Law and Intellectual Property Law Division, Office of the Judge Advocate General (OTJAG).

Subpart 5127.3 -- Patent Rights Under Government Contracts

5127.303 -- Contract clauses.

(d) (2) Send required documentation within 20 calendar days after award.

5127.304 -- Procedures.

Refer questions about Army procedures to the Chief, Regulatory Law and Intellectual Property Law Division at the address in 5127.203-6.

Subpart 5127.6 -- Foreign License and Technical Assistance Agreements

5127.675 -- Foreign license and technical assistance agreements between a domestic concern and a foreign government or concern.

5127.675-2 -- Review of agreements.

(a) Proposed agreements must be sent through the Head of the Contracting Activity (HCA) for review by appropriate patent and technical personnel. The comments and recommendations of the HCA must be sent to the Deputy Assistant Secretary of the Army for Defense Exports and Cooperation (DASA (DE&C)), ATTN: SAAL-ZN, 1777 N. Kent St., Arlington, VA 22209. [AFARS Revision #21, dated May 22, 2007]

Subpart 5127.70 -- Infringement Claims, Licenses, and Assignments

5127.7004 -- Requirements for filing an administrative claim for patent infringement.

(c) Forward all communications which --

(1) claim that the manufacture, use, or disposition of any article, material or process by or for any agency or component of the Army involves the use of any invention, whether patented or un-patented, and

(2) make a claim for compensation, to the HCA which ordered the manufacture, use or disposition of the article, material or process (except in AMC, forward them to the Commander, AMC). The HCA and Commander, AMC, shall process the matter in accordance with DFARS Subpart 227.70, Subpart 5127.70 and Army Regulation (AR) 27-60.

5127.7006 -- Investigation and administrative disposition of claims.

(S-90)

(1) The office that has been granted clearance to investigate a claim may settle that claim in accordance with DFARS 227.7006, 5127.7006 and AR 27-601 by executing a patent release and settlement agreement, license agreement or assignment.

(2) Fiscal procedures.

(i) An agreement to pay a fixed amount for any release and settlement agreement, license agreement or assignment, either by a lump-sum payment or an amount determinable at the time of contract execution, is subject to the provision that the fixed amount to be paid may not exceed the funds available for the purpose. Prior to incurring any obligation, officials charged with making such agreements shall submit the proposed agreements to the cognizant finance and accounting officer for verification of the availability of funds. The following statement shall be included on the face of the agreement:

The supplies and services to be obtained by this instrument are authorized by, are for the purpose set forth in, and are chargeable to the following allotments; and available balances are sufficient to cover the cost of the supplies and services.

(ii An agreement to pay running royalties on future acquisitions is not subject to the requirement for the statement contained in (A).

(iii) Questions on fiscal procedures related to patent matters may be referred to the Regulatory Law and Intellectual Property Law Division, Office of the Judge Advocate General. (See 5127.203-6 for address.)

(3) Delegations of authority and approval requirements.

(i) Under Section 606(b) of the Foreign Assistance Act of 1961 (75 Stat. 440, 22 U.S.C. 2356(b)) and DoD Directive (DoDD) 2000.3, authority to enter into agreements with claimants in full settlement and compromise of any claim against the U.S. under Section 606(a) of the Foreign Assistance Act of 1961, subject to the requirements of DFARS Subpart 227.70 and Subpart 5127.70 and other rules and regulations published by higher headquarters, is delegated to the Commander, AMC; and the Chief of Engineers. This authority may not be redelegated, except that the Commander, AMC, may redelegate to the Commanders of major subordinate commands only.

(ii) (A) Approval by the Judge Advocate General or designee is required for all agreements authorized by the Foreign Assistance Act of 1961 (22 U.S.C. 2356), the Invention Secrecy Act (35 U.S.C. 181-188) or 10 U.S.C. 2386 when the agreement --

(1) Provides for total payment by the Government, including reasonable anticipated royalties, of $500,000 or more;

(2) Includes a license to different Government agencies on different terms;

(3) Provides for compensation for damages other than for infringement of patents or copyrights, e.g., claims under the Foreign Assistance Act or the Invention Secrecy Act;

(4) Contains a release or license which may operate to release a contractor from an obligation to indemnify the Government;

(5) Is in settlement of patent or copyright infringement liability for the use of foreign patents or copyrights;

(6) Is with a government or national representative of a government within the scope of a Foreign Assistance Program; or

(7) Requires the signature of, or concurrence on behalf of, another agency of the Government.

(B) When approval of an agreement is required, the office requesting approval shall submit the number of executed agreements with original signatures that is required to be approved to the Chief, Regulatory Law and Intellectual Property Law Division, OTJAG. (See 5127.203-6 for address.) The agreement shall be accompanied by a memorandum of facts signed by an authorized official of the office requesting approval.

(C) Upon approval of the agreement by the Judge Advocate General or designee, one executed and approved copy of the agreement shall be forwarded directly to the United States Patent Office to be recorded. The remaining executed and approved copies shall be returned to the office that requested approval, for distribution.

(4) Distribution of agreements.

(i) An executed and approved agreement with original signatures shall be retained by each contracting party and each office processing the request for approval.

(ii) A copy of each license which provides for the payment of a running royalty shall be forwarded by the office requesting approval to each interested HCA. Receipt of a copy of the license shall constitute notice that further procurement of the licensed subject matter requires the payment of royalties to the licensor. When necessary, the HCA shall notify the contracting offices affected.

[AFARS Revision #21, dated May 22, 2007]

5127.7011 -- Procurement of rights in inventions, patents, and copyrights.

(1) Subject to the limitations in DFARS Subpart 227.70 and Subpart 5127.70, the following, and their designees, are authorized to acquire the items and rights described in 10 U.S.C. 2386 and to enter into agreements in settlement of resulting claims:

(i) The Commander, AMC.
(ii) The Chief of Engineers.
(iii) The Surgeon General.
(iv) The Commander, U.S. Army Space and Missile Defense Command.

(v) Other contracting activities must obtain written approval of any proposed agreement from the addressee at 5101.290(b)(1) through the Chief, Regulatory Law and Intellectual Property Law Division, OTJAG, (see 5127.203-6 for address), except for agreements for acquisition of the right to reproduce copyrighted material when acquisition cost is $2,500 or less.

(2) Send all communications relating to proposed patent licenses or assignment to the chief patent counsel or legal officer supporting the contracting office as soon as they are received.

(3) To assist national defense, various patent owners voluntarily grant royalty-free licenses, assignments and releases to the Government to use the inventions covered by their patents and applications for patents. Obtain a recommended, standardized format for such a grant from the Chief, Regulatory Law and Intellectual Property Law Division, OTJAG.

[AFARS Revision #21, dated May 22, 2007]