Tag Archives: Intellectual Property

Pentagon Intellectual Property And Enterprise Tool Challenges

Image: DAU


The Pentagon is in the midst of releasing a flurry of guidance related to its new adaptive acquisition framework. The public got its first look at the software pathway early in January when a Navy official informally released the interim guidance.

Besides the usual bureaucratic challenges of documentation and approval, two highlights could make or break the Pentagon’s ability to move fast on software.


“Like the middle-tier acquisition pathway, the budding software pathway is exempted from the regular requirements and milestone review processes. But software programs must still submit abridged requirements documents through a parallel, but “expedited,” approval process. Similarly, an acquisition strategy and set of metrics must be submitted in lieu of formal milestone reviews.

Intellectual property

A crucial component of the acquisition strategy is a plan for intellectual property (IP). As the recently released intellectual property policy specified, IP plans emphasize “the criticality of long-term analysis and planning during the earliest phases of the program.” Long-term planning is required for IP so that specified terms and pricing can be set up front, for such things as who owns the data, whether third-parties can modify the code, and which interfaces will be used. But if used improperly, it could lock in technical plans at the expense of course correction.

The IP process may run against the stated intentions of the software pathway policy — that programs use agile development methods. Some of the values from the Agile Manifesto include: responding to change over following a plan; collaboration over contract negotiation; and working software over comprehensive documentation. The requirement of defining all IP needs upfront runs counter to the values of agile.

If software is supposed to be incrementally released, then the definition of IP needs and pricing should also be an iterative exercise. Otherwise, the Pentagon’s IP policy would in practice necessitate a waterfall planning process. Developers would have to execute within the constraints of the IP plan.

Enterprise tools

The challenges of defining — and the unresolved problem of pricing — IP rights may be alleviated by a second highlight of the interim software policy: enterprise tools. Using government-owned infrastructure and platforms, many parts of the software program do not need to be recreated and separately priced. Firms can compete primarily on the application layer.

Building on enterprise tools like a government cloud, for example, would have saved the Pentagon from its IP struggle with Lockheed Martin over F-35 sustainment data. The company claimed ownership of data collected by the Automated Information Logistics System and stored on its premises. Data reports delivered to the government had Lockheed’s proprietary markings.

The U.S. Air Force has taken the lead in standing up enterprise tools for the services. Chief Software Officer Nicholas Chaillan is in the process of releasing the Unified Platform layer upon which applications can be built and deployed. The Air Force has increased funding for its Unified Platform and related elements from just over $55 million in fiscal 2019 to a request of nearly $100 million in 2020.

The Unified Platform will in turn run on government cloud solutions, which will incorporate the forthcoming Joint Enterprise Defense Infrastructure, or JEDI, contract expected to run $10 billion over the next 10 years.

Chaillan explained. “You go to big companies, they have infrastructure cloud team, they have a platform team, you don’t have each software team building the entire stack from scratch. They can reuse all these existing enterprise capabilities in terms of testing and security.”

Enterprise tools help minimize the amount of effort, and thus IP planning, required of individual software efforts. By reducing the cost of building and operating new applications, more modularized software can be written by competing suppliers. It increases participation from companies of all sizes.

With viable alternatives not only in development, but in operations, tugs and pulls of the market may reveal efficient pricing for IP without lock-in effects from sole-source providers. In other words, the government will be less reliant on lifecycle planning and cost data.

By building on government-owned infrastructure and platform layers, applications can be modularized and priced incrementally. That will help bring the business team into a culture that supports agile developers. Enterprise tools may then help move the software acquisition pathway away from “water-agile-fall” and toward a real agile development process.

Investments in enabling tools and technologies can accelerate program developments. They should be given higher funding priority as programs in themselves. If enterprise tools are built, the question remains whether the services and contractors will adopt them.”


New Army Policy On Intellectual Property


The Army’s new policy, tries to balance the government’s priority to maintain U.S. military competitive advantage by leveraging advanced American technologies while also allowing inventors and companies to fairly benefit from their intellectual work.

Emphasis on four tenets to effectively value IP rights. They include: opening communication; early planning and development of customized IP strategies; negotiation of custom data and licenses; and early negotiation to secure competitive prices.


“Both the government and the defense industry strive to provide warfighters with the best capabilities, but the government must act in the best interest of taxpayers and the defense industry in the best interest of corporate shareholders. The tension between controlling costs and increasing revenues creates a battle over who benefits from IP.

The legal protections surrounding IP establish boundaries and terms for its use. Protections, like trademarks, patents, copyrights and trade secrets, give entrepreneurs the legal security necessary to earn a return on their investments, making them a lucrative asset.

Industry faces two major challenges when selling intellectual property to the government. The first stems from the government’s rights to use, modify, adapt, disseminate, reproduce or disclose IP. The government’s rights in these scenarios directly depend on how much funding it provided for development.

Under some circumstances — falling under the right to disclose or disseminate — the government may share acquired data with third parties. These third parties sometimes include direct competitors of the IP-generating company.

The second challenge concerns the protection of exclusionary rights inherent to IP. The Bayh-Dole Act requires government contractors to disclose inventions derived from federal funding, leaving contractors vulnerable to a government decision to exercise its “march-in” rights. Under the act, when a contractor breaches their obligation to commercialize a patent, the government may effectively seize control of the intellectual property and grant licenses to third parties. Although the government reportedly has never exercised this option, contractors worry about being the first victim.

The government also faces significant intellectual property challenges. The biggest of these challenges is “vendor lock,” which occurs when vendor-controlled IP precludes competition for sustainment or upgrade contracts. When the government fails to obtain the rights to certain key parts of a new capability’s intellectual property, it loses the ability to work with other contractors to drive better sustainment deals or develop innovative upgrades, which drives up costs and limits capability development.

Another challenge arises when the government lacks an intellectual property strategy at the beginning of a major defense acquisition program. This lack of strategy can result either in the government accepting a costly long-term contract with a single company or vendor, or the government requiring ownership of the entire technical base as part of the request for proposals. Lack of strategy frequently results in the government acquiring more rights and information than it needs.

In a discussion June 18 about the new policy at the Center for Strategic and International Studies, Alexis Lasselle Ross, the Army’s deputy assistant secretary for strategy and acquisition reform, acknowledged this misguided practice prioritizes acquisition officer ease and comfort over program savviness. IP control overreach can carry excessive financial costs and disincentivize industry innovation, she said.

To visualize the tension between the two sides, it may be helpful to envision a spectrum of intellectual property rights. On one side, the IP is completely proprietary to the innovator, and on the other side, the government owns everything. Innovators and government have traditionally begun negotiations on opposite sides of the rights spectrum. The new policy seeks to incentivize finding middle ground, with focus placed on early negotiation and custom licenses.

The heavy focus placed on early negotiation and developing custom strategies and licenses will benefit both the Army and industry. By incentivizing program managers to determine intellectual property strategies early in the procurement process, the Army addresses its problem of waiting too long and paying too much. The Army will need to think about what it needs to build and sustain capabilities before developing its strategy for acquiring the requisite IP. Providing a space for planning and negotiations early in the acquisition process also helps to reduce innovators’ risk of losing intellectual property on the back end of the contract, reversing the chilling effect on innovators from the government’s current practice of generally requesting every piece of data.

The policy also encourages negotiating custom data and licenses so both government and industry have transparent understanding of data rights and obligations from program inception. In some cases, especially when thinking about competitive sustainment and upgrade potential, the rights required by the government will be significant. In other instances, the need for extensive intellectual property ownership by the government will be much less. Either scenario requires clearly defining agreements reached during contract negotiation, ultimately ensuring both government and industry understand how rights will be divided moving forward.

The Army’s new intellectual property policy creates repeatable procedures that build predictability into the acquisition process to deliver better capabilities at lower cost, benefiting both government and companies.”


Army Revamping Intellectual Property Policies


Army IP


“Futures Command will help spearhead a new approach to technology development and acquisition.

“We’ll have a non-disclosure agreement we can sign across the table and make sure that we understand what is and is not to be disclosed by the government outside the government,”..

“The Army will soon change the way it deals with contractors’ intellectual property, a top acquisition official said Aug. 21.

Many in industry have been wary of doing business with the Defense Department due to worries that their IP won’t be protected.

The Army is about to implement new policies to address those concerns, said Bruce Jette, assistant secretary for acquisition, logistics and technology.

“Many of you are small” companies, he said at the National Defense Industrial Association’s Army Science and Technology Symposium in Washington, D.C. “The No. 1 thing that you own is your intellectual property.”

Right now, the government is “leaky,” he warned members of industry. “Until we get some more stringent rules in place … you better be prepared for [your IP] to be exposed,” he said.

The Army is trying to fix the problem, he said.

“We’ve got an extensive intellectual property policy that’s being written,” he said. It is currently being “scrubbed” by Pentagon officials to make sure it complies with the Federal Acquisition Regulation, Defense Federal Acquisition Regulation Supplement and other policies, he noted.

Jette said he expects the reviews to be completed and the new rules to be in place within a month or two.

In the meantime, he advised contractors to protect their IP, or “secret sauce,” by not revealing it until formal contract negotiations are underway.

Changes from the new policies could include non-disclosure agreements.

If “you sit down [and] you want to exchange something that might be a little bit more ‘secret sauce,’ we’ll have a non-disclosure agreement we can sign across the table and make sure that we understand what is and is not to be disclosed by the government outside the government,” he said.

The Army also wants to protect itself from being too closely tied to a single vendor. Unclear IP policies have led to problems in the past, he noted.

When the service provides funding to further develop a proprietary product that a company has been working on, it can lead to complications, he said.

“The problem the government has with that is maybe your company goes belly up,” he said. ”Maybe you sell to somebody that I don’t want to buy from anymore, you know, a foreign entity, whatever. All of a sudden I’ve got this stuck together relationship, not to mention the fact that down the road maybe we want to change something” with the system, he added.

The Army is looking to license or buy products in a way that doesn’t lock the service into dealing with one supplier indefinitely.

“It means that you have to stay competitive but you get your intellectual property protected,” Jette said. “We want interfaces that are exchangeable and modular … [but] we take care of you at that front end.”

Jette was asked how industry can avoid clashing with government engineers when trying to avoid disclosing proprietary information.

Gen. James McConville, Army vice chief of staff, speaks at NDIA’s Army Science and Technology Symposium Aug. 21. (Melanie Yu/NDIA)

“That should get better … when I put the IP policy out,” he said. “We will try to get it out in such a way that you all [in industry] can see it as well and that the engineers will see it.”

Government officials will receive training, briefings and have other discussions about the new rules intended to protect intellectual property, he noted.

Jette said he doesn’t expect much resistance to the new way of doing business.

“When you talk about culture change within the government, I don’t think this one is that difficult,” he said. “I may be kidding myself but we’ve got good people [and] I think that they can respond to it.”

The move to revamp IP policies comes as the Army is trying to engage more with nontraditional partners to further its modernization goals.

The service is setting up a new Futures Command in Austin, Texas — a commercial innovation hub — to oversee its top six modernization priorities. They include: long-range precision fires; next generation combat vehicle; future vertical lift family of helicopters; the network; air-and-missile defense; and soldier lethality.

The command will be led by Lt. Gen. Mike Murray, whose nomination was confirmed by the Senate Aug. 20. Top brass are expected to attend the official activation ceremony later this week. The new organization is slated to be fully operational next summer.

Futures Command will help spearhead a new approach to technology development and acquisition, Army Vice Chief of Staff Gen. James McConville said at the S&T conference.

“We’ll do a lot more experimentation, a lot more demonstrations up front,” he said. “In the past we used to produce these very large requirement documents that are huge and they prescribe to industry exactly what we needed and what needed to be done.”

Going forward, the Army is looking for industry to bring ideas and innovations to help inform requirements and provide greater insights into what is technologically achievable.

“We’re finding we can be quicker by working with industry and being a little less prescriptive in finding what type of technology is available, and opening up to … nontraditional industry partners as we go forward by providing them a problem statement” instead of telling companies what to build, he said.

The establishment of Futures Command could result in a restructuring of the Army’s research-and-development laboratories. Over the next six to 12 months, there will be evaluations of how to make them more effective, Jette said.

McConville said there are no immediate plans to change the way that program executive offices are structured. “We’re going to see how that plays out.”


$10,000 Toilet Seats and Data Rights: The Air Force’s New Dilemma


10,000 Toilet Seats and Data Rights


“The U.S. Air Force never expected to fly aircraft such as the Cold War-era B-52 Stratofortress bomber for as long as it has, much less for another 30 years as it now plans to.

Although the conversation around data rights has been going for nearly 20 years, the issue has gradually become a more common problem.”

“So if the Air Force continues to modernize its legacy fleets in addition to buying new, more advanced equipment and planes, it will need to have more access to technical data and software often owned or operated by industry partners, experts say.

“There is no real process to define what technical data requirements are in major acquisition programs,” said Heather Penny, senior fellow at the Mitchell Institute for Aerospace Studies.

Penny and a pair of former top Air Force operations officials debuted their study, “Data Requirements and Rights: Time for a Reassessment,” at the Air Force Association headquarters near Washington, D.C. on Monday.

Assistant Secretary of the Air Force for Acquisition, Technology and Logistics Will Roper recently told DefenseOne the Air Force could do more with 3D printed parts.

But the service doesn’t inherently own the rights to manufacture specific components, he said. Nor does it have a surefire way of dealing with that kind of intellectual property.

Taxpayers are paying a high price as a result, he said.

For example, Roper said he could 3D print new toilet seat covers for C-17 Globemaster IIIs at a cost of roughly $300 per seat. But because the manufacturer owns the rights, the service needs to rely on industry to instead produce the item at a whopping $10,000 per seat.

“You’ll think, ‘There’s no way it costs that,'” Roper told DefenseOne last month. “No, it doesn’t, but you’re asking a company to produce it and they’re [busy] producing something else,” he said.

The central questions surrounding the issue of data rights are: Who has access to what? And what does the Air Force need to own in order to operate effectively?

It’s a dilemma the service and the Defense Department as a whole is likely to keep encountering, the authors said.

“This is much bigger than aircraft,” Penny said. “This is about the transition from the industrial age to the information age.”

The findings of the study come as the Air Force in recent months has shown interest in expanding the type of data it receives through its contracts, particularly contracts for sustainment, for additional source codes, computer software, blueprints and architecture systems in order to keep up with modernizing its fleets. And there are many moving pieces to the complex puzzle.

Data rights laws have been enacted in most cases to limit dramatic increases in program lifecycle costs should the government seek to acquire data unhelpful to it in the first place.

At the same time, the Air Force doesn’t want to limit competition.

“Firms may choose not to participate in future acquisitions, or defense primes may need to acquire small businesses in order to satisfy the government’s demands for the data (thereby decreasing competition),” the study said.

The Mitchell paper suggests that because the Pentagon, and particularly the Air Force, has had an inconsistent approach to how it sustains certain programs, it needs to be more transparent in its contracts going forward.

“Acquiring the appropriate data rights during initial contract award is the most cost effective solution for the US government, and sets the right relationship between the contractor and the government,” the study said.

“No acquisition is the same, and data rights should not be treated the same across those acquisitions. [But] the Air Force must adapt their acquisition practices and workforce to address their increased need for data requirements and rights,” it added.

One suggestion? The experts say standing up a small cadre of Air Force data rights focused acquisition officers to act as liaisons between defense companies and the service may help programs and contracting in the long-term.

“Nothing happens between the government and industry without a contract,” Penny said.”



U.S. Army Prioritizes Research And Development (R&D) Funding And Intellectual Property Policies


Army Reaearch and Development


“The idea is to put the money not on various projects that may have been growing with a life of their own, but instead bring that money back against the top six priorities.

More commercial model that may involve purchasing licenses from industry.  Industry can also license intellectual property from the government.”

“The Army’s assistant secretary for acquisition, logistics and technology is looking to aid the service’s modernization efforts by implementing new policies regarding research and development and intellectual property.

Bruce Jette said the Army has already realigned R&D funds to meet its top modernization priorities, which include long-range precision fires, a next-generation combat vehicle, future vertical lift platforms, a mobile and expeditionary communication network, air and missile defense capabilities, and soldier lethality.

“The idea is to put the money not on various projects that may have been growing with a life of their own, but instead bring that money back against the top six priorities,” he said March 28 at the Association of the United States Army’s Global Force Symposium in Huntsville, Alabama.

Additionally, Jette’s office wants to give more freedom to researchers and lab directors by providing some funds that are specifically geared towards innovating technologies that the military may not have anticipated, he noted.

“We can’t … incrementally engineer breakthroughs, and that’s what we’re trying to do is give them the freedom to do that,” he said.

Jette said the service is also working to establish a fund aimed at crossing the “Valley of Death,” referring to the process for transitioning new technologies into existing programs of record.

For example, a senior commander “would sit there and say ‘OK, one of the guys has this project, he’s got it done, it’s ready, and do we want to actually put it into that program?’” Jette said.

Following consultation with the program manager, senior leaders would then make a decision on the way forward, he explained. “We decide it’s worth it. We do it with our eyes open and … then we fund the transition.”

Jette also wants to improve how industry and the government handle intellectual property. Both sides have been “sloppy,” he said.

“The government starts using your IP, you start using the government’s IP, you can’t get extricated and we begin having unpleasant complications,” he said. There needs to be movement towards a more commercial model that may involve purchasing licenses from industry, he added.

“I’ve done this on the outside. Show me the box — that’s your IP. Put that in the bid. Show me what the limits of that [are],” he said. “Tell me what you want to do for licensing … [and] we can have conversations.”

Industry can also license intellectual property from the government, he noted.

If “we built something and … you want to apply it commercially, you want to apply it to another effort, I’m willing to talk about licensing fees,” he said. “Most people don’t realize that, but the government can get paid for their intellectual property.”





US Patent System is So Broken Almost No Patented Discoveries Ever Get Used





“We all know the patent system is broken.  

…...a market so constricted by high transaction costs and legal risks that it excludes the vast majority of small and mid-sized businesses and prevents literally 95 percent of all patented discoveries from ever being put to use to create new products and services, new jobs, and new economic growth.

What Is Broken and How to Fix It

Here’s the challenge in a nutshell: innovation drives the economy, but much of the new technical knowledge required for such innovation is contained only in patents. The U.S. patent database is the world’s largest encyclopedia of technology improvements and technology experts in the world. Some of that database is directly relevant to the new products and services that any individual company is working on improving or creating. But the database is too hard to access.

Accessing the knowledge and expertise contained in the patent data-base is not a problem for large Fortune 500 companies. Giant companies have long recognized the value of the patent database and spend millions, and in some instances billions, on dedicated teams and expensive tools to mine the patent database for competitive advantage and effective legal risk management. But for the vast majority of smaller and mid-sized businesses that are responsible for the bulk of U.S. job creation, patents represent not a treasure trove of new technical knowledge but a growing multi-trillion-dollar database filled with infringement risk.

As a result, most small and mid-sized firms instruct their employees not to read patents that might help improve their products and services. This deprives those firms from being able to build on the knowledge these patents contain and, in turn, help other companies improve their products and so on. This kind of behavior, though legally prudent, defeats the patent system’s whole purpose of technological disclosure and commercialization.

The problem is not just who is excluded from the opportunity to commercialize patented inventions—i.e., the overwhelming majority of sub-Fortune 500 firms who are the backbone of the U.S. economy. The system also makes it all but impossible to commercialize any but the biggest blockbuster inventions, including the more incremental advances that are usually the most useful in solving the pressing problems of daily existence.

In their study, Dr. Litan and Dr. Singer offered a sports analogy to illustrate how such a constricted patent licensing system harms the economy:

“It is as if the economy were playing a game of baseball in which the only hits that counted were home runs by just those players on very well-financed teams,” they wrote. “In such an economy, vast numbers of other valuable or ‘run-producing’ innovations—triples, doubles, [or] singles—generated by many other firms, universities or individual inventors cannot be economically licensed given the potential risks or costs of litigation.”

In short, confining the commercialization of invention to the risky and hugely expensive machinery of our court-centered licensing system is severely retarding innovation, not promoting it. And in the process, the patent system itself is losing much of its original democratic character and popular support.

Patents Were Created to Level the Playing Field

Remember, America’s Founders quite consciously created the first patent system in the world aimed at the common man, in contrast to the feudal and elitist patent systems prevailing in Britain and Europe at the time. The first patent law passed in April of 1790 set patent fees to a level any ordinary citizen could afford — less than 5 percent of the rate in Britain. It encouraged large numbers of people, the vast majority of whom lacked the wealth to build factories and manufacture products from their patents (now called “non-practicing entities”), to participate in inventive activity. And in a huge break from European patent systems of the day, it facilitated the licensing and sale of patent rights, thereby creating the world’s first market for new technology.

The low patent fees and ability to license patent rights turned invention into a new income-earning career path for thousands of poor but technically creative citizens. And as a result, within 50 years the U.S. per capita patenting rate reached three times the rate in Britain. U.S. inventors were also far more prolific than their British counterparts, creating five times as many patented inventions as Britain did each year, even though our populations were then roughly equal in size. By 1885, the U.S. per capita patenting rate was quadruple that of Britain.

This democratized patent system thus directly stimulated America’s growth from an economic backwater wholly dependent on imports into the unrivaled leader of the worldwide Industrial Revolution. In the words of historians Naomi Lamoreaux of Yale and the late Kenneth Sokoloff of UCLA: “Observers attributed much of the country’s rapid technological progress to its distinctive patent system. Quite revolutionary in design at inception, the U.S. patent system came to be much admired for providing broad access to property rights in new technological knowledge and for facilitating trade in patented technologies. These features attracted the technologically creative, even those who lacked the capital to directly exploit their inventions.”

If we’re honest with ourselves, we must admit that the patent system today has lost much of its original democratic character. Sure, anyone with a good inventive idea (and at least $20,000 for legal and other fees) can get a patent. But what can you do with that patent? More than likely, you won’t be able to put it to good use unless you have the multi-million-dollar resources required to launch a startup, secure a licensing deal with a big corporation or, if necessary, litigate to stop an infringer. Those are all unlikely pathways.

How ironic that we live in a democratized technological ecosystem in which anyone can invent and patent anything, yet it is mostly just the rich and powerful who can effectively partake of its resources. The patent system is thus hostage to a costly and exclusionary legal system.

So let’s liberate it.

  • What relevant technologies and technologists are available to help us improve our products and services and improve the way we do our business?
  • What technologies are our competitors investing in that may show up in future products, services or business practices?
  • And what technologies are we using that might inadvertently trespass on someone else’s patent right?

The challenge for the overwhelming number of American companies is huge, as it is with any new way of doing business. But the need is also great, because any industry that does all its deals in federal court is clearly not in good shape.”


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