Technical Data Rights - Finding Common Ground

By Stew Magnuson

Art: iStock

The Mitchell Institute for Aerospace Studies recently invited reporters to a media roundtable to present two new studies. One was about the chronic pilot shortage. The other was an in-depth look at the ongoing controversy over who owns the technical data rights, or intellectual property, when the military acquires a technology from a contractor.

The latter subject was as exciting to some people as “watching the paint dry,” head of the institute, retired Air Force Lt. Gen. David Deptula, admitted as he kicked off the talk.

But there were free sandwiches, so the reporters listened politely to the presentation and even asked a few questions about this arcane topic.

And then in the middle of the roundtable discussion President Donald Trump made a surprise announcement that there would be a “space force” — separate but equal to the Air Force.

Many of the journalists wolfed down what remained of their sandwiches and made a beeline for their offices where most — including this one — shoved the matter of technical data rights into the farthest recesses of their minds as they wrote about the implications of a potential new armed service.

But the report, “Data Requirements and Rights: Time for a Reassessment,” written by retired Air Force Col. Herbert C. Kemp, retired Air Force Maj. Gen. Lawrence Stutzriem and institute Senior Fellow Heather Penney, deserves a closer look.

Drying paint is trivial unless one paints houses for a living. Then it’s very important. And so is the controversy facing the Pentagon and the defense industry, which are at odds over how much of a company’s technical data should be shared with defense programs.

The Defense Department wants this data so it can affordably sustain a weapon system for years to come without the company that created it having a monopoly on repairs and upgrades.

“The Air Force is acting rationally, as is Congress, in pushing the Air Force to reduce sustainment costs from a lifecycle perspective,” said Stutzriem.

On the other hand, intellectual property is a company’s “crown jewels,” and signing it away is abhorrent to them.

That is particularly true of the innovative technology companies outside the defense realm that the Air Force and other services are attempting to woo. They are simply not going to give their IP away to the government, Stutzriem added.

One of the problems Penney pointed out is that the acquisition system was created in the industrial age and military technology is transitioning to the digital age. The system has not adapted.

The government already receives operations, maintenance, installation and training data out of the box, she said. Software is not technical data and doesn’t fall in these categories. “But what appropriately belongs in that category is becoming fairly contentious,” she said.

"Both sides must engage in ‘continuous and collaborative’ dialogue from the outset of a contract to reduce the antagonism now found between the Air Force and industry."

For nontraditional contractors — which the Defense Department has been bending over backwards to attract — any demand for IP is likely to scare them away, Penney said.

“Because commercial content is privately funded, it complicates the data rights available to the government,” she said. As the government looks for more liberal licensing rights, it might goad the commercial companies to exit the marketplace. Or it could make the commercial content more expensive, she added.

Highly innovative firms, the ones the Air Force is seeking “are simply not going to put their IP at risk,” Kemp said. Many of them don’t need the government to be successful, he added.

Meanwhile, “there is no real process to define what technical data requirements are in major acquisition programs.” The study looked at several Air Force programs and found many inconsistencies.

“It’s a matter of different styles between the program offices,” Penney said.

Kemp added: “It is not clear to us that the Air Force acquisition establishment really understands the valuation of intellectual property, [and] the role of profit in attracting capital to continue to innovate.”

The report had several recommendations. One is to stand up a cadre of acquisition officials who specialize in data rights. Most officials in the field on the government side have no experience working in industry. Yet piling on more training to an already stressed acquisition workforce may be counterproductive, the report said. That’s why it’s important to hand-select and train specialists.

Stutzriem said they must understand how to translate the need for data rights into contract language. And there needs to be a better understanding of how to define these requirements, he said.

There is no lack of guidance in the federal regulations. “Is it being enforced is the question,” he added.

Creating this new cadre of experts “won’t happen overnight,” he concluded.

Another recommendation is to develop a series of data rights templates that flexibly adapt to program needs.

Both sides must engage in “continuous and collaborative” dialogue from the outset of a contract to reduce the antagonism now found between the Air Force and industry, Penney said. “Through dialogue ... it can be more collaborative, tailored and customized to each program,” she added.

While the report examined Air Force programs, the authors said it is an issue across the services as they are all under more pressure to reduce costs.

“We do believe it is possible to come to a win-win, understanding what are the mechanisms that incentivize and reward industry for their innovations,” Penney said.

Topics: Infotech, Defense Contracting

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