Defense innovation initiatives out of sync.

• Author: Chandler, Scott
• Position: Commentary

In the first of four trips to Silicon Valley over the last year to advance his innovation agenda, Defense Secretary Ashton Carter assured his Stanford audience that DoD is a strong proponent of protecting intellectual property rights. However, this statement does not reflect actual policy on intellectual property, a reality widely understood, and the disconnect suggests this innovation outreach is likely in vain.

Defense acquisition policy is defined in statute, in regulation, in published guidelines, in training and in defense media--and most if not all of it is public. DoD's competition guidelines include a large section on intellectual property strategy which instructs government contracting officers to establish an IP strategy for the "full spectrum of IP and related issues," which it deems as a "critical mechanism to remove barriers to competition." In the month following Carter's first visit to Silicon Valley, then-chief acquisition officer for the Air Force Bill LaPlante wrote: "We cannot achieve our goals of developing, procuring and fielding adaptable and agile capabilities without our government program offices 'owning the technical baseline.'"

At the Reagan National Defense Forum, defense procurement chief Frank Kendall expressed the view that "industry uses IP as a weapon to gain competitive advantage."

Carter recognized in that first Silicon Valley speech that "IP is often the most important and valuable asset a company holds." Company valuation by investment bankers, stock market analysts and venture capitalists is in large part based on the company's intellectual property portfolio, and its ability to monetize it through new products and financial returns. DoD's own guidebook on intellectual property, written in 2001 understood that "a company's interest in protecting its IP from uncompensated exploitation is as important as a farmer's interest in protecting his or her seed corn."

The 2012 National Defense Authorization Act awarded the government new rights to data generated or used in performance of a contract and data required for segregation and reintegration of items into major programs--even for commercial items--plus other new rights. These new rights already in statute have been dormant since then subject to rulemaking which was finally introduced June 16. The prospect of these powerful new government rights going into effect has been unsettling in the defense industrial base and a warning to the non-traditional...