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Senate Defense Authorization Bill Has Provision That Will Nationalize Intellectual Property

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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.

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