Status quo requirements undermine defense industry innovation – the DOD requires contracts to surrender intellectual property, limiting competition and deterring investment

Shyam Sankar is the Chief Technology Officer of Palantir Technologies. Caitlin Dohrman is the Chief Executive Officer of Tangram Flex. Madeline Zimmerman is a Department of Defense Deployment Strategist at Palantir Technologies. THE MILITARY’S INSISTENCE ON OWNING COMMERCIAL INTELLECTUAL PROPERTY IS LIMITING INNOVATION; War On The Rocks; https://warontherocks.com/2024/01/the-militarys-insistence-on-owning-commercial-intellectual-property-is-limiting-innovation/

At first glance, the issue of commercial intellectual property rights may seem unrelated to how the U.S. government seeks to meet the needs of America’s warfighters, but Department of Defense leaders are beginning to recognize that intellectual property policy has become a serious obstacle to defense innovation. In the age of advanced software and AI, the U.S. government is coming to rely more on the procurement of dual-use commercial technology to give the armed forces a strategic, operational, and tactical edge. In fact, in the first-ever National Defense Industrial Strategy released last week, the Department of Defense explicitly highlighted the importance of intellectual property and data rights policies as a pathway to flexible acquisition and sustainment. Unfortunately, today, the U.S. government and the commercial software industry are frequently at odds in their vision for how much government intellectual property ownership is required for critical national security programs to succeed. There is a requirement for the secretary of defense to “define the legitimate interest of the U.S. government” when asking companies to give up their intellectual property. While this requirement is meant to protect commercial intellectual property, in practice many commercial vendors are subject to solicitation requirements for either “unlimited rights” or “government purpose rights.” Unlimited rights enable the government to use, modify, reproduce, release, or disclose technical data or computer software in whole or in part, in any manner, and for any purpose whatsoever, including to a company’s competitors. Government purpose rights are slightly more restrictive, but still allow the government to use the software within government without restriction and outside government if there is a government purpose. The result is that software providers eager to support the Department of Defense risk losing the very assets that sustain their business: company intellectual property. This not only dissuades commercial technology providers from seeking government contracts, it places a particularly onerous burden on younger non-traditional tech firms that are hoping to break into the defense industrial ecosystem — both of which limit the public-private partnerships necessary to ensure that the United States stays ahead of technologically advanced competitors.