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Wednesday, October 11, 2023

Practical Intellectual Property Management for Small Business Federal Government Contractors


We have previously discussed Intellectual Property (IP) and Proprietary Data (PD) protection for small business:

The above posts discuss rights in technical data and software assertions, non-disclosure and teaming agreements as well as proprietary data protection involving the government and industry partners.

This article expands those discussions by offering practical operations guidelines involving IP protection for small business government contractors.


The World Intellectual Property Organization defines IP as:

“….creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.    Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.”


Bringing IP into existence requires that the tangible property as a result come under control.  For small business this is usually brought about by a series of encounters with IP.  They are discussed below in the relative order in which a small business encounters them.

Company Founding Personnel

A small business usually encounters IP and PD concerns when it is formed.  The operating agreement between the founders must address these matters from the perspective of who brings property to the venture and who owns it as well as the rights to the property developed thereafter. A typical operating agreement may be downloaded from the Box Net “References” cube in the right margin of this site.  Please examine it as a framework and add those elements that are unique to your enterprise.

Employees and Contractors

The next encounter usually entails employees or contractors who apply for work.  It is wise to inquire as a standard practice, and as part of an employment agreement or contract, whether or not an individual has signed a non-compete or proprietary data agreement with prior employers.  If they have, acquire a copy of the agreement and assess whether or not the employment of these personnel poses a risk of IP violations in terms of another company's property or their claim to ownership of what the candidate may develop on your behalf while in your employ. 

Make it clear in your agreements of hire and contracts that IP and PD that employees may participate in developing are the exclusive property of the company, that they will not own it and that they are expected to protect it, even when they leave your firm.

Industry Partners

Declare in your non-disclosure, teaming, and contract agreements the precise definition of the IP and PD ownership brought to the table and the exact share of ownership in subsequent development items.  Most firms use the efforts of their employees (labor records) as a basis to make these distinctions, but further specificity may be necessary on complex projects. 
Government Agencies and Prime Contractors

Ensure your policies and practices utilize assertions to document the ownership of IP and sound job cost accounting records for any IP developed at company expense, either in the past or during the course of a contract. The link below discusses the following major rights assertions in detail:

Unlimited Rights
Government Purpose Rights (GPR)
Limited Rights
Restricted Rights
Small Business Innovation Research (SBIR) Data Rights
Specifically Negotiated License Rights
Prior Government Rights
Commercial License Rights


Intellectual property and proprietary data protection should be tailored to your organization, its industry relationships, people and practices.  It must grow as the company grows, adapt to changing conditions and be ever-sensitive to risk.

The best intellectual property protections are well understood, practical, teaming relationships among partners, employees, industry and government.  All sides in such relationships lose if disclosure or violations occur. 

Establish sound operations practices and train to insure these practices meet the objectives discussed herein to protect your organization IP. 

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