Senate Defense Authorization Bill Has Provision That Will Nationalize Intellectual Property

Townhall.com ^ | September 9, 2016 | Brian Darling

[Kaslin]

Intellectual property rights are under attack from Congress. On Monday, the Senate is expected to vote on a motion to proceed to S. 1519, the “National Defense Authorization Act for Fiscal Year 2018.” That bill contains a provision that would nationalize the intellectual property of software firms that do business with the Department of Defense. 

The big high profile fights on the NDAA will be on issues where the Trump Administration disagree with Senator John McCain’s (R-AZ) drafted and committee passed bill. According to The Hill, the Trump Administration has a number of problems with the bill including “a prohibition on new base closures, changes to how the president can curtail military pay raises, organizational changes at the Pentagon, steps to develop a missile that would violate a treaty and a continued prohibition on recognition of Russian sovereignty over Crimea, among a slew of other provisions.” Equally important is this provision that was added at the behest of Senators who want the federal government to take over the development of software in defense contracting like progressive hero Sen. Elizabeth Warren (D-MA).

The Senate annually passes a defense authorization bill that helps to keep defense programs running.This process to pass this annual bill takes months and, this year, the House has already passed the bill. Next week the Senate takes a cut at the bill, and then it goes to a House and Senate conference. Traditionally this is one of the last bills to pass every year, and sometimes the bill can carry provisions that have little to do with national security. This year, there is a little-noticed provision in the bill that will greatly harm national defense, while at the same time attack the idea of intellectual property.

The bill has a provision buried that will completely change the way that the Defense Department procures software from computer technology corporations. The provision is found in Title VIII, Subtitle I – “Development and Acquisition of Software Intensive and Digital Products and Services.” This provision completely changes the way that software is sold and designed for the federal government in a way that will expose intellectual property to the world and our enemies like China, North Korea, and Russia. 

Technology companies invest billions to develop revolutionary new source codes. These source codes for software companies are considered the most sensitive information of a company because that is how a company makes money. The Senate version of the defense authorization bill would demand that the companies hand over source codes as a cost of doing business with the department. The provision further would set up a database where the defense department would publish the intellectual property. This is the same source codes specially designed to protect the United States national security from ISIS and nations who are intent on harming us. 

Current law protects privately developed source codes, yet Sections 881 to 886 would do the opposite and expose trade secrets to competitor companies and the enemies of the United States. National security would be immediately harmed because there would be an exodus of expert contractors. Insourcing of these functions would lead to the government trying to produce the new cutting edge source codes – does anybody think the federal government would be good at this?

This terrible provision would also expose the Department of Defense computing systems to new cybersecurity risks. This provision makes no sense. This idea obviously would provide a deterrent for any technology company to do business with the Department of Defense – and that is the goal.

This is an idea being pushed by progressives. The Center for a New American Security (CNAS) has written positively in a piece titled “Open Source Software and the Department of Defense.” The CNAS was co-founded by Michele Flournoy, President Obama’s Under Secretary of Defense for Policy and has been championed by many former Obama Administration staff.

Next week will be a big week for the future of how the federal government treats contractors and whether they will demand a company to hand over IP as a cost of doing business with the federal government. This is clearly a dumb business model, yet why would we expect anything different from a federal government that has proven to be a terrible allocator of resources and one that has managed to put the U.S. taxpayer in the hole for $20 trillion in debt.

[Yo-Yo]

What makes the author think that private software companies are any less vulnerable to hacking or industrial espionage than the NSA or the Defense Department?

What makes the government think that software companies would have any incentive to bid on contracts with the government knowing that their intellectual property would be handed over?

The government can, and in many defense-sensitive cases does, include a stipulation in the procurement contract that requires the source code to be revealed to the government. This is done on a case-by-case basis and is negotiated into the contract price.

Forcing this stipulation on all transactions is going to hurt both sides.

[libertylover]

I’ve written software for a lot of government programs and the source code is almost always provided via contract. This is not new.

[Magnum44]

Agreed, this is a contracts issue. The senate should butt out and repeal obozocare.

[AndyJackson]

This article is utter horseshit. If you can sell code to the government while keeping the source code proprietary, you have a lifetime license to bilk the taxpayers for maintenance, upgrades, bug-fixes, etc.

This is how the swamp works to keep itself in business.

Oh no, only we can repair that engine on that vehicle. It uses a special patented bolt to mount the engine block. This is the software equivalent.

Don't fall for the whining scam folks.

[Kaslin]

That does not surprise me. You always find great links,

[Kaslin]

This is not an article. This is an op-ed. It means the author has an opinion and he writes about the subject.

Your opinion is that the op-ed is utter horseshit. You are perfectly entitled to your opinion, but give the author the courtesy to be entitled to his opinion.

[AndyJackson]

Yes. I know he is expressing his opinion, which is shilling for the defense contracting bandits in and leaching off of the swamp. And my opinion is that his opinion is horseshit. Either he is doing it deliberately, or he is doing it ignorantly thinking he is upholding some sort of principle when he isn’t.

[Mariner]

What the commies want to do here, ostensibly in the name of cost reduction and efficiency, is to Nationalize Aegis and F-35 source code.

Then publish it openly so other businesses can develop products that plug into that code...like a new missile, radar, targeting computer etc.

I think they are well meaning, but as always very, very stupid and shortsighted.

Did I mention STUPID?

[ThunderSleeps]

Agreed, when it makes sense, contractors turn over source as part of the contract deliverables. Often the algorithms and parameters are classified. They can’t be published.

[zzwhale]

LOOK AT WHAT A GREAT JOB THE GUBMUNT DID WITH THE OBAMACARE WEBSITE....

AND THEY WANT CONTROL OVER SOFTWARE...
cant stopp laughing....
warren is a fraud and a commie...
mccain is a liberal who craves war.... take a deep breath johnny

TRUMP CAN VETO...
these people forgot
ELECTIONS AHVE CONSEQUENCES...
to quote the limp wristed bendover bathhouse towelboy muslim TRAITOR...obumbler

[KC_for_Freedom]

And I’ve worked on a lot of projects with source code from developers. We sign a non-disclosure agreement but we need to have the source code to de-bug problems when the purchased equipment does not correctly interface with other equipment.

The problem most seen when two systems don’t work properly is that each provider claims the problem is the other guy’s problem to find and fix. This logically means that the prime contractor has to understand both inputs and frequently we do find problems and go back to one of the suppliers for an update.

[KC_for_Freedom]

And I’ve worked on a lot of projects with source code from developers. We sign a non-disclosure agreement but we need to have the source code to de-bug problems when the purchased equipment does not correctly interface with other equipment.

The problem most seen when two systems don’t work properly is that each provider claims the problem is the other guy’s problem to find and fix. This logically means that the prime contractor has to understand both inputs and frequently we do find problems and go back to one of the suppliers for an update.

[pepsi_junkie]

Sounds like they want to make it the law that the DOD only procure software with government purpose rights. Typically the government will insist on either unrestricted rights (they can do anything including publishing the code online, give it away, etc) or government purpose rights (they can give the code to other DOD contractors and agencies for relevant contract work for the government but not to uninvolved third parties). However in recent years they have been bullying contractors into handing over the rights to software you developed on your own dime via R&D. You know, you can keep your contract and all your people will still have jobs if you agree to sign over all the rights in the next contract mod, otherwise we terminate. If you're in the business of doing work for the DOD primarily, well, they get what they want regardless of the fact that it makes contractors less innovative and more inclined not to invest their own resources into R&D (just innovate to the extent that the contract allows, since the government will just seize the rights to whatever internal investment R&D products we come up with anyway).

Anyway that bullying approach won't work with microsoft, HP, Oracle, etc. Maybe that's why they are going this route.

And by the way, I think the government isn't being evil in their approach. They have two primary concerns: getting locked into a once-good vendor who has them over a barrel on IP rights and starts gouging them (or refuses to do DOD work at all) and cyber security concerns that the code they get is written in many cases by foreign nationals and may contain unknown trojans and logic bombs. Their approach to try to keep the nation secure has been to unofficially squeeze contractors to give up their rights "voluntarily" as a condition of winning new work. It's somewhat unethical but it seems pretty much standard process of late. I think I'd rather they just be up front about it and make it the law.

[rcofdayton]

The author knows nothing about how the DoD acquires rights to software and other intellectual property. If a work is created exclusively with federal funds, the government gets unlimited rights to it. Nothing unfair about that. It can provide the work to anyone. If the work contains classified information the work is subject to the limitations governing classified information. The creator still has copy right protections. If the work was created exclusively with private funds, the government gets only limited rights or restricted rights (the latter applies only to software. There are a few exceptions. See 10 U.S.C. section 2320 and Title 48 of the Code of Federal Regulations (CFR). See the Defense Acquisition Regulation to the CFR, part 27.

[catnipman]

i don’t buy the doom and gloom BS in this article:

First, contractors are not being forced to contract with the Feds if they don’t like the terms.

And second, nothing says that contractors won’t be paid for the source code. In other words, the contractor can negotiate in the contract the price to be paid to develop and sell source code to the Feds.

I’m not sure what the exact motivation of this provision is, but can easily see that it might be addressing a problem, like, say, Raytheon develops millions of lines of code for the various anti-missle systems they are paid by the Feds to develop, but insist on retaining ownership of the source code, either as a sledgehammer to be used regarding future contract negotiations, or even worse, selling or having the source code stolen by enemies like China or the Norks.