Handling IP Disputes in Government Contracts: Legal Strategies

Contract Meeting

Government contracts often involve complex intellectual property (IP) issues. These contracts typically demand innovative solutions, requiring contractors to leverage their IP assets while navigating stringent regulatory environments. When disputes arise, they can threaten the contractor's business and the execution of the government project. Therefore, understanding effective legal strategies for handling IP disputes in government contracts is crucial.

Understanding the Nature of IP Disputes in Government Contracts

IP disputes in government contracts usually involve issues like ownership of inventions, the scope of licenses, infringement claims, and the use of proprietary data. The federal government has specific IP rights rules, which can sometimes conflict with a contractor's interests. The Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) are key regulations. These regulations outline how IP rights are allocated between the government and contractors, often favoring the government’s need to use, modify, and disclose technical data and software.

Early Identification and Mitigation of Risks

The best strategy to handle IP disputes is to prevent them from arising. Early identification of potential IP issues during the contract negotiation phase is critical. Contractors should carefully review contract terms related to IP rights, ensuring clarity on ownership, licensing, and the scope of rights granted to the government.

Additionally, contractors should maintain meticulous records of their IP assets, including patents, copyrights, trademarks, and trade secrets. These records should demonstrate clear ownership and usage rights, vital in asserting and defending IP claims.

Drafting Clear and Comprehensive Contracts

Drafting clear and comprehensive contracts is another essential strategy. Contracts should explicitly define IP terms, including:

  1. Ownership Rights: Clearly state who owns the IP created during the contract.
  2. Licensing Terms: Specify the scope of the government's license to use the contractor’s IP.
  3. Confidentiality Provisions: Ensure robust confidentiality clauses to protect proprietary information.
  4. Dispute Resolution Mechanisms: Include specific procedures for resolving disputes, such as arbitration or mediation, which can be faster and less costly than litigation.

Navigating FAR and DFARS Regulations

Understanding and navigating FAR and DFARS regulations is crucial for handling IP disputes. Contractors must be aware of the different IP clauses that can be included in government contracts, such as:

  • FAR 52.227-11: This clause deals with patent rights and specifies how the government can use patented inventions developed under the contract.
  • DFARS 252.227-7013: This clause covers rights in technical data and computer software, providing guidelines on using and disclosing such information.

Familiarity with these clauses enables contractors to negotiate more favorable terms and better protect their IP.

Effective Dispute Resolution Strategies

When disputes do arise, having effective resolution strategies is vital. Key approaches include:

Mediation and Arbitration

Mediation and arbitration can be effective alternatives to litigation. Mediation involves a neutral third party facilitating a negotiated agreement, while arbitration involves a binding decision from an arbitrator. Both methods can be faster and more cost-effective than court proceedings.


In some cases, litigation may be unavoidable. When pursuing litigation, contractors should be prepared with detailed documentation of their IP claims and a thorough understanding of relevant laws and regulations. Engaging experienced legal counsel who specializes in government contracts and IP law is crucial.

Administrative Remedies

Sometimes, disputes can be resolved through administrative remedies, such as filing a claim with the contracting officer or appealing to the agency’s board of contract appeals. These processes can provide quicker resolutions compared to federal court litigation.

Leveraging Government Resources

Contractors can also leverage government resources to resolve IP disputes. For instance, the U.S. Patent and Trademark Office (USPTO) offers mediation services for patent disputes, and the Government Accountability Office (GAO) provides forums for resolving bid protests, which can sometimes involve IP issues.

Handling IP disputes in government contracts requires a multifaceted approach that includes early risk identification, precise contract drafting, a deep understanding of relevant regulations, and effective dispute resolution strategies. By implementing these strategies, contractors can better protect their IP assets and maintain positive relationships with government clients. Navigating this complex landscape demands diligence, proactive planning, and skilled legal support to preserve IP rights and resolve disputes efficiently.

Contact Martensen IP today to learn more!

Related Posts
  • Common Legal Pitfalls in Government Contracts and How to Avoid Them Read More
  • Patents And Small Business, Take 2: Government Contracting Read More
  • Open-Source Software In Government Contracts Read More