Under the SBIR and STTR programs, your company retains ownership of the intellectual property it develops with the award. What the government receives is a license to use the data it paid for. Those are two different things, and confusing them is the mistake that costs founders commercial control of technology they thought was entirely theirs.
Owning it and controlling who uses it are separate questions
Ownership answers who holds title: your company does, and the award does not transfer it. Data rights answer a narrower question — what the government may do with the reports, drawings, specifications, test results and software you deliver. You can own a patent outright and still have handed the government a standing right to use the underlying deliverables for its own purposes without paying you again. Founders who read "the small business retains the intellectual property" and stop there are answering only the first question. The general ownership picture for federally funded work is the right starting point, but the license attached to your deliverables is where the commercial consequences live.
What the government's license generally covers
The framework in the SBIR Policy Directive gives the government a license to use SBIR data for government purposes while restricting, for a defined protection period, its ability to disclose that data outside the government or use it to have the work reproduced by someone else. The protective effect is real: during that window a competitor cannot obtain your delivered design package through the agency and build against it. It is also finite, and the terms for how long it runs have been revised over the years, so read the actual clause in your award rather than relying on what a colleague remembers. Note what the license does not do — it does not give the government ownership, and it does not stop you from selling, licensing or patenting the same technology commercially.
Why the scope varies by agency and instrument
There is no single national answer, and this is where most wrong advice originates. A grant administered under the Uniform Guidance, a contract administered under the Federal Acquisition Regulation, and a DoD contract carrying the defense supplement each attach data rights differently, and agencies layer their own terms on top. The same technology under a NIH grant and a DoD Phase II contract can carry meaningfully different obligations. Two practical habits follow: identify before you sign which instrument you are under and which data rights clause it incorporates, and mark every deliverable exactly as that clause requires, because unmarked data is routinely treated as delivered with broader rights than you intended. Building this into your wider IP protection strategy — alongside patents and trade secret practice — is far cheaper than arguing about it later. Your reporting obligations are the moment the question becomes concrete, because reports are deliverables.
This is general information, not legal advice. Data rights questions turn on the exact clause in your award, and they belong with counsel experienced in federal contracting before you deliver anything.
Projects House builds hardware and software under federal awards and knows how deliverables get packaged. Bring us your award terms through the contact form.