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Intellectual Property Rights
Contractual Options for Ownership of Intellectual Property refer to the various arrangements and clauses that can be included in government contracts to define how IP rights are allocated between the government and the contractor. These options are crucial for establishing who retains ownership of IP developed during the contract and under what conditions the government can use that IP.
When the federal government contracts for goods or services, who owns the innovations, designs, or creative works that emerge from that work? These contractual arrangements determine ownership and usage rights for intellectual property created during government contracts. Here's the thing: getting this wrong can mean either losing valuable IP to contractors or overpaying for rights the Crown doesn't actually need.
How It Works
The Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts establishes a clear default position: contractors own "Foreground IP" they develop under Crown contracts. This represents a significant shift from historical practices where government ownership was more common. The policy applies to procurement contracts of any value and reflects a recognition that contractors are often better positioned to commercialize innovations.
But there are exceptions. The Crown can claim ownership when specific conditions in Appendix A apply—think national security concerns, public health and safety requirements, or when the contract's primary purpose is IP development itself. You can also seek an exemption through a Treasury Board Submission, though that process requires justification. Most departments avoid this route. In practice, they stick with the default and negotiate licence-back provisions instead.
PSPC's Standard Acquisition Clauses and Conditions Manual provides ready-made contract language for these scenarios. Clause K3200T, for example, addresses standard IP terms including the government's licence to use contractor-owned IP for its operational needs. The key is matching the clause to your situation: will you need ongoing access? The right to sublicense? Options vary based on what you're buying and how you'll use it.
Key Considerations
You must report all IP ownership arrangements for contracts valued over $10,000. This reporting requirement catches many procurement officers off guard, especially on smaller contracts where IP wasn't front of mind during planning.
Just because the contractor owns the IP doesn't mean you're left empty-handed. The standard approach includes a licence back to the Crown for government purposes. Define those licence terms carefully—your department's future needs depend on it.
Claiming Crown ownership increases your costs. Contractors price in the lost commercialization opportunities when they won't own resulting IP. Consider whether full ownership is genuinely necessary or if a broad licence achieves your objectives at lower cost.
The policy intersects with your procurement planning obligations under the Directive on the Management of Procurement. Identify potential IP issues during requirements definition, not after you've issued a solicitation.
Related Terms
Background IP, Foreground IP, Crown Copyright, Licence Agreements, Statement of Work, Contract Administration
Sources
The best IP strategy aligns ownership with your actual operational needs while maintaining value for money. Default to contractor ownership unless you have documented reasons for an exception.
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