Limited rights and negotiated licenses

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1. When the government gets limited rights

Limited rights are one of three standard licenses in technical data under the Defense Federal Acquisition Regulation Supplement (DFARS). They attach to technical data on items, components or processes developed exclusively at private expense, unless a listed unlimited rights category applies (DFARS 227.7103-5(c)(1)). They also attach to data created exclusively at private expense under a contract that calls for no development or production of items. Under the clause, data pertaining to privately developed items carry limited rights when marked with the limited rights legend the clause prescribes (DFARS 252.227-7013(c)(3)(i)).

Limited rights are the rights to use, modify, reproduce, release, perform, display or disclose technical data, in whole or in part, within the government (DFARS 252.227-7013(a)). Without the written permission of the party asserting them, the government may not release the data outside the government, use the data for manufacture, or authorize another party to use them.

2. Three outside uses the license allows

The definition permits three releases outside the government without permission (DFARS 252.227-7013(a)). The first is a release necessary for emergency repair and overhaul. The second is a release to a covered government support contractor performing its support contract. The third is a release to a foreign government of data other than detailed manufacturing or process data, when its use is in the government’s interest and required for evaluational or informational purposes. In each case the recipient must be barred from further reproduction, release, disclosure or use, and the contractor asserting the restriction must be notified.

The DFARS sets the same three exceptions in its own text (DFARS 227.7103-5(c)(2)). The person asserting limited rights must be notified before the release, except that notice of a release for emergency repair or overhaul is given as soon as practicable (DFARS 227.7103-5(c)(3)). Before any permitted release, the recipient has to complete the DFARS 227.7103-7 agreement, or get the data under a contract carrying DFARS 252.227-7025 (DFARS 227.7103-5(c)(4)).

A recipient of limited rights data for emergency repair or overhaul must destroy the data and all copies promptly after the work is done, and notify the contractor (DFARS 252.227-7013(c)(3)(ii)). The government must require that of the recipient.

3. Covered government support contractors

A covered government support contractor is one whose contract’s primary purpose is to give the government independent and impartial advice or technical assistance for managing and overseeing a program (DFARS 252.227-7013(a)). It does not directly furnish an end item or service for the program. It must not be affiliated with the prime contractor, a first-tier subcontractor, or a direct competitor of either. It must also receive the data under a contract containing DFARS 252.227-7025. Litigation support contractors are excluded from the definition.

The contractor acknowledges in the clause that limited rights data may be released to covered support contractors and that it will be notified of any such release (DFARS 252.227-7013(c)(3)(iv)). It may require each support contractor to sign a nondisclosure agreement directly with it, or waive that requirement in writing. Any such agreement must address the restrictions in DFARS 252.227-7025, and may add other terms only if both parties agree.

4. No obligation to give more

The contractor, its subcontractors and suppliers are not required to give the government additional rights in data furnished with limited rights (DFARS 252.227-7013(c)(3)(iii)). If the government wants more, the contractor agrees to enter promptly into negotiations with the contracting officer on whether acceptable terms exist. Data in which additional rights are granted must be listed or described in a license agreement made part of the contract, which enumerates the added rights. The contractor releases the government from liability for releases made under the limited rights definition, under a negotiated license, or by others to whom a recipient released the data (DFARS 252.227-7013(c)(6)). It agrees to seek relief only from the party that misused marked data.

5. Specifically negotiated licenses

Specific licenses are negotiated when the parties agree to modify the standard rights, or when the government wants rights in data in which it has none (DFARS 227.7103-5(d)(1)). In negotiating, the acquisition strategy is considered for the item, including logistics support. The government may accept lesser rights where it holds unlimited or government purpose rights, but may not accept less than limited rights. The negotiated license must state what rights the government has to release the data or authorize others to use it, and all negotiated rights go in a license agreement made part of the contract.

The clause takes the same approach. The standard rights, including the length of the government purpose rights period, may be changed by mutual agreement, but never to less than the rights in the limited rights definition (DFARS 252.227-7013(c)(4)). Data in which the government already holds rights are delivered with those rights, unless the parties agree otherwise or the restrictions have expired (DFARS 252.227-7013(c)(5)).

6. Alternatives to buying more rights

When the government needs additional rights in data it holds with government purpose or limited rights, the contracting officer must negotiate to see whether acceptable terms exist (DFARS 227.7103-5(d)(2)). Generally, that should happen only when the data must be disclosed outside the government, or when the rights are needed for competitive reprocurement and the savings expected are estimated to exceed their cost. Before negotiating for more rights in limited rights data, the DFARS lists three alternatives to consider.

The first is using performance specifications and form, fit and function data to acquire or develop functionally equivalent items (DFARS 227.7103-5(d)(2)(i)). The second is a contractor’s commitment to qualify additional sources and keep adequate competition among them (DFARS 227.7103-5(d)(2)(ii)). The third is reverse engineering, or providing items from government inventories to contractors who ask for them to develop equivalent items by reverse engineering (DFARS 227.7103-5(d)(2)(iii)). The nondisclosure agreement that governs releases is covered in government purpose rights and the nondisclosure form.

Key terms

Limited rights	Use within the government, with release outside only in three listed cases.
Emergency repair and overhaul	A permitted release, after which the recipient destroys the data.
Covered government support contractor	An unaffiliated adviser to the government on managing a program.
Specifically negotiated license	A license modifying the standard rights, never below limited rights.
Release from liability	The contractor’s agreement to seek relief only from the party misusing marked data.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Maintenance and repair abroad depend on the data rights in place. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.