Government restricted rights: Overview, definition, and example
What are government restricted rights?
Government restricted rights refer to the limitations placed on the use, modification, or distribution of intellectual property, software, or technical data by government agencies under specific regulations. These rights typically arise when private companies develop technology, software, or intellectual property using government funding or contracts.
For example, under Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) in the United States, the government may receive limited rights or restricted rights to commercial software or data, meaning it can use the product but cannot disclose or modify it without the contractor’s approval.
Why are government restricted rights important?
Government restricted rights help balance government access to contractor-developed technology while protecting private companies’ intellectual property. These rights ensure that:
- The government can use software or technical data for its intended purpose without unauthorized redistribution.
- Contractors maintain ownership of their proprietary developments, preventing unrestricted government use beyond contractual terms.
- Clear guidelines exist for the licensing, modification, and confidentiality of intellectual property in government contracts.
For businesses, understanding government restricted rights is essential to protecting proprietary technology and negotiating fair licensing terms when working on government-funded projects.
Understanding government restricted rights through an example
Imagine a defense contractor develops a cybersecurity software system for a government agency under a federal contract. The software license includes a government restricted rights clause, allowing the government to use the software for internal purposes only but preventing it from sharing the software code with third parties or modifying it beyond its original scope.
In another case, a biotech company develops a medical database system partially funded by a federal grant. The government has restricted rights to use the system for research, but the company retains full commercial rights to sell or license the technology to private entities.
An example of a government restricted rights clause
Here’s how a clause like this might appear in a government contract:
“This software and accompanying documentation are provided with Government Restricted Rights. Use, duplication, or disclosure by the Government is subject to restrictions as set forth in applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS). The Contractor retains all proprietary rights not granted to the Government under this Agreement.”
Conclusion
Government restricted rights define how government agencies can use intellectual property, software, and technical data developed by private contractors under government contracts. These restrictions protect contractor-owned technology, while ensuring that the government can use what it funded. Companies engaging in government contracts must carefully review and negotiate these rights to safeguard their proprietary innovations while complying with regulatory requirements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.