Lots of people pointed me in the right direction.  Dave Mayo gave a very
clear and detailed answer, so I am sharing it.  Thanks to all, and
especially to Dave.

My question problem was:
What FAR or DFAR reg TO A COMMERCIAL CONTRACTOR would require that THEY
flow down to a University subcontractor the rights in 52.227-11?  The
situation is that a defense contractor, clearly under DOD $, is offering us
commercial style "everything belongs to them" IP terms, and I want to find
out if that position is a violation of their contract requirements.

Dave pointed out:
Actually, both of the standard FAR patent clauses 52.227-11 and -12 include
very specific instructions to prime contractors that only the appropriate
one of those two is to be flowed down to a subcontractor.  Assuming that
your prime contractor has 52.227-12 in their contract AND you are
non-profit and performing R&D on this subcontract, section of
52.227-12(g)(1) would apply to you:

The Contractor shall include the clause at 52.227-11 of the Federal
Acquisition Regulation (FAR), suitably modified to identify the parties, in
all subcontracts, regardless of tier, for experimental, developmental, or
research work to be performed by a small business firm or nonprofit
organization.

This section goes on to say:

The subcontractor shall retain all rights provided for the Contractor in
this clause, and the Contractor shall not, as part of the consideration for
awarding the subcontract, obtain rights in the subcontractor's subject
inventions.

In other words, not only must they flow-down to you 52.227-11, they are
prohibited from obtaining ANY rights to your invention unless you agree
(unless they also happen to be co-inventors - but I wouldn't bring that up
unless they do and then just let it be determined under public law, since
that is what would happen if its not addressed in the subcontract).  If the
prime contractor is worried about securing rights on behalf of the federal
government, you can let them know they don't have to worry about it - that
you can disclose on a DD882 just as easily as they can.  In fact you can
offer to send the DD882 through them.  If they are worried about having
access to your technology developed under the subcontract in order to
accomplish their prime contract, you can reassure them that they will have
access to your technology via the government's "government purpose license
rights" in your technologies.

Everything I have described above assumes that your prime contract is
governed by the FAR and, therefore, by the Bayh-Dole Act.  I have seen
contracts issued by DoD which are authorized not as a grant or FAR contract
(procurement) but as an "Other Transaction."  Other Transactions are not
governed by the FAR and I've heard the case made by prime contractors AND
the government that Bayh-Dole does not apply to these.  Fortunately, Other
Transactions are few and far between and I wouldn't worry about them unless
you have no FAR clauses in your subcontract.
Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Express Delivery Only:
 Sanger Hall, Rm. 1-073
 11th & Marshall Streets
 Richmond, VA  23219
Voice:  804-828-6772
Fax     804-828-2521
OFFICE e-mail   xxxxxx@VCU.EDU
Personal e-mail xxxxxx@vcu.edu
http://views.vcu.edu/views/ospa/

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