A recurring concern voiced by small or emerging companies working in the government marketplace is, “How do I effectively protect my IP when I’m forced to work with large prime contractors?” A threat is perceived that a prime contractor will take or steal the IP from a subcontractor (small company) to eliminate competition or capture leverage with the government and that the government turns a blind eye to such actions.

Is there truth in this fear? Yes and no. It is exceptionally rare that companies, of any size, steal IP. Does it occur? Yes. Is it the norm? No. What is the norm is that companies often give away their IP. And such gifts are normally done unwittingly. It may be more accurate to state that they fail to take the necessary steps to protect their IP.

Operating Effectively in the Government Marketplace

To deal effectively with this reality, it is important to recognize that the government marketplace is unique. The regulations that govern these transactions have been developed over the past 200 years and, as some would say, have been unimpeded by progress. They are what they are. No one company, large or small, is going to change the way the government operates.

The government gains the rights to data and inventions laid out in the applicable regulations. For most contracts, these rules are found in the Federal Acquisition Regulations (FAR) and its associated supplements. Contracting officers for the government are charged with protecting the government’s best interest just as would be a contracting officer for any company. It’s no surprise to find out then that disagreements on IP between a prime and subcontractor fall on deaf government ears when the government’s rights are not implicated.

Clearly the government, as a customer, is unique. One unique characteristic of the government as a customer is that it has little to no competition. In the government marketplace, the number of customers is usually one. In a commercial marketplace,…