The Commonwealth generally obtains unlimited rights in software/technical data which is developed solely at Commonwealth expense. The Commonwealth may obtain government purpose rights (usually for up to five years, when they then become unlimited) in software/technical data developed partly at government expense. The Commonwealth obtains limited/restricted rights in noncommercial software/technical data developed solely at private expense.
"Government or Commonwealth/agency expense" is defined as that IP developed exclusively at Commonwealth expense or that software development was not accomplished exclusively or partially at private expense or IP that was developed with mixed funding: (1) partially with costs charged to indirect cost pools and/or costs not allocated to a Commonwealth contract, and (2) partially with costs charged directly to a Commonwealth contract.
Agencies should strongly consider utilizing licensing arrangements with suppliers in which the supplier retains ownership of its IP and grants the agency (or Commonwealth) a license to use the IP. This licensing approach will lower the overall contract cost by allowing the supplier to retain their IP ownership and the right to market it to others. In addition, a licensing approach will increase the pool of suppliers willing to submit proposals thus increasing competition. Through a licensing approach, agencies will also avoid potential liability in the event of an IP infringement suit by a third party against the owner of the IP and will avoid the administrative and resource burdens associated with future IP support and maintenance issues.
If an IT system or project is federally funded, then the agency should determine if any federal laws or regulations mandate the type of IP arrangement. A federal law or regulation may mandate that an agency acquire a broad license to all IP produced at the government's expense.