# Defense Patent Holiday: DoD Offers Free Access to 400 Military Patents > The Pentagon just launched a pilot that waives fees and royalties on defense lab technology. Here's what practitioners need to know. **By Paul Roberts** | 🔍 Critical Spotlight 📊 **2,650 words** | ⏱️ **11 min read** #Legal_Update #Patent_Law #Critical_Spotlight #Defense_Tech #Technology_Transfer February 3, 2026 ![[MPL Patent Holiday Square.avif]] --- ## What Just Happened The Department of Defense launched the **Defense Patent Holiday**—a pilot program offering no-fee, royalty-free Commercial Evaluation Licenses (CELs) on approximately 400 government-owned defense patents for a two-year period.[^1][^2] The DoD waives licensing fees and royalties for companies evaluating military technology during this period. The program runs in two phases. Phase one makes roughly 400 curated patents available online for a free two-year trial.[^3] Phase two involves building a single, searchable database spanning all 216 defense laboratories.[^4] Under Secretary of Defense for Research and Engineering Emil Michael—who also serves as DoD Chief Technology Officer overseeing the Defense Innovation Unit, DARPA, and the Chief Digital and Artificial Intelligence Officer[^5]—characterized this as creating "the most incentive possible for first movers" by removing barriers, noting that the government has historically collected only small amounts of revenue on these patents.[^6] ## The Bottom Line **What you get:** Two-year, royalty-free Commercial Evaluation License on approximately 400 government-owned defense patents. **What it costs:** Nothing during the evaluation window. **Target technologies:** Critical minerals, advanced materials, microelectronics, munitions, and energetics.[^7] **Who administers it:** Office of Technology Transfer, Transition and Commercial Partnerships (T3CP).[^8] **Industry Day:** DoD held a kickoff event January 22, 2026 at the Pentagon.[^9] ## The Legal Foundation ### Federal Agencies Can License Royalty-Free The regulatory foundation for royalty-free licensing is explicit. 37 C.F.R. § 404.4 states: > "Federally owned inventions shall be made available for licensing as deemed appropriate in the public interest... Licenses **may be royalty-free or for royalties or other consideration.**"[^10] The implementing regulations for federal technology transfer explicitly authorize agencies to grant royalty-free licenses.[^11] ### The Statutory Framework: 35 U.S.C. § 209 Section 209 governs licensing of federally owned inventions. The statute requires that: 1. **Public interest:** Licensing serves the public, indicated by the applicant's ability to bring the invention to practical application[^12] 2. **Competition:** Granting the license doesn't substantially lessen competition[^13] 3. **U.S. manufacturing:** Products embodying the invention are normally manufactured substantially in the United States[^14] 4. **Reasonable terms:** The license includes reporting requirements and termination provisions[^15] But notice what the statute does NOT require: royalty payments. The statute focuses on achieving "practical application"—getting inventions used—not on generating licensing revenue. ### What "Commercial Evaluation License" Means The term "Commercial Evaluation License" isn't uniform across federal agencies. The key question: does the CEL permit only internal testing, or limited commercialization during the evaluation period? According to DoD materials, the CELs "allow a company to evaluate a patented technology's technical performance, market potential and business viability" and permit companies to "test and integrate technologies into research and development efforts and assess scale-up challenges without incurring upfront licensing costs."[^16] Whether this extends to actual commercial sales during the evaluation period depends on the specific license terms. ## The Scale of Federal Tech Transfer Federal laboratories disclosed 5,965 new inventions in FY2020, filed 2,577 patent applications, and received 2,623 issued patents.[^17] The Army's FY2024 data provides context: 977 active CRADAs (Cooperative Research and Development Agreements), 1,125 active patents, 159 active patent license agreements, and 81 new patent applications filed.[^18] The DoD spends $3.3 billion annually on research and development at its 216 laboratories.[^19] Those labs generate approximately 600 patented inventions per year spanning virtually all technology fields.[^20] The program's underlying hypothesis: defense technology remains underutilized because the friction of discovering, evaluating, and licensing defense patents makes them unattractive compared to internal R&D. ## Examples from the Holiday Portfolio MITRE has fourteen patents in the Defense Patent Holiday program, spanning sensing, materials, energy, aviation safety, and quantum technologies.[^21] The Air Force Research Laboratory is offering patents on secure microchips, 3D-printable "energetic compounds" for use as propellants or explosives, and powerful magnets less reliant on rare earth metals.[^22] The program emphasizes "breakthrough defense technologies from the lab to the warfighter."[^23] ## What Companies Need to Do ### Registration and Support Companies interested in participating can work with TechLink, a DoD partnership intermediary that helps navigate the licensing process.[^24] The Air Force also works with nonprofit groups around the country through "Primary Intermediary Agreements" (PIAs). These groups—many based at universities or tech incubators—serve as "your no cost nonprofit guides—your easy button—to get started," according to Air Force technology transfer officials.[^25] The PIAs also facilitate security screening to ensure participants aren't security risks. ### Security Vetting This is non-negotiable. Companies must demonstrate they're not foreign-owned, controlled, or influenced (FOCI) risks. Export control compliance is mandatory.[^26] For startups with foreign investors or multinationals with complex ownership structures, FOCI screening could be the bottleneck. ## What Happens After Two Years Michael noted this is "a pilot program that will evolve," stating: "Without figuring out what the next 20 years looks like, we're going to figure out what the next year or two look like, and then we'll go from there."[^27] The two-year evaluation window is firm. What follows—whether the program extends, expands, or ends—depends on program outcomes. After the evaluation period expires, companies wanting to continue using the technology will need to negotiate standard licensing agreements. ## Strategic Considerations for Different Players ### For Startups The fee waiver matters most to smaller companies where upfront licensing costs and royalties create genuine barriers to experimentation. Michael acknowledged this: "I like the idea of the smaller businesses where this fee waiver and this royalty waiver is likely to make a bigger difference."[^28] But he also noted larger players will benefit, envisioning scenarios where smaller players take technologies forward and partner with bigger companies for scale production.[^29] ### For Prime Contractors The program provides low-cost R&D access to technologies that might otherwise be cost-prohibitive at commercial licensing rates. The two-year window creates competitive urgency. Multiple companies can obtain CELs for the same patents, eliminating exclusivity advantages. ### For In-House Counsel Key questions before your business unit commits: 1. **Scope:** What exactly does the CEL permit? Internal testing only, or limited commercialization? 2. **Exclusivity:** Are these nonexclusive licenses? Can multiple companies license the same patent? 3. **Term and termination:** What triggers automatic termination? What happens at two years? 4. **Background IP:** Does the license create obligations regarding your company's own intellectual property? 5. **U.S. manufacturing:** What domestic manufacturing requirements apply? 6. **Export control:** What are FOCI screening requirements and ongoing export control obligations? 7. **Reporting:** What utilization reports or performance milestones must you provide? Don't assume "free" means "simple." Government licenses include termination rights, utilization requirements, and reporting obligations. ## The Bigger Context: Why DoD Is Doing This Michael framed the problem clearly: "We spend just under $4 billion annually funding [military] labs, and they produce an incredible amount of stuff. What we're trying to do today is make sure that that money is spent wisely on the invention, and then we ask commercial industry to take that money and those inventions and bring them forward. And you make a business out of it."[^30] The Defense Patent Holiday is part of a broader DoD reorganization. Michael recently became the DoD Chief Technology Officer in addition to his Under Secretary role, with the Defense Innovation Unit, the Chief Digital and Artificial Intelligence Officer, and DARPA brought under his purview "to accelerate and coordinate their work."[^31] The goal: consolidate defense innovation efforts and reduce barriers to defense technology commercialization. ## What the Patent Holiday Is Not **This is not Bayh-Dole march-in rights.** Bayh-Dole applies to privately owned inventions made with federal funding. The Patent Holiday applies to government-owned patents where the government already holds title.[^32] **This is not compulsory licensing.** Participation is voluntary. Companies apply for CELs; the government doesn't force anyone to license anything. **This is not a waiver of patent law generally.** The government still owns the patents. After the evaluation period, standard licensing applies. **This is not "all defense patents."** This is approximately 400 curated patents the DoD selected as having the highest commercial potential. The rest of the defense patent portfolio requires standard licensing. ## Questions That Remain Open ### Will Companies Actually Use These Licenses? The program bets that removing financial barriers will increase experimentation. But if companies still need expensive technical diligence, legal review, and FOCI screening to even evaluate whether a patent matters, the financial barrier just shifted—it didn't disappear. Success requires not just free licenses, but a streamlined discovery and evaluation process. ### Will Two Years Be Enough? Technology development cycles often exceed two years. Companies need time to evaluate the technology, determine product-market fit, develop prototypes, secure funding, and scale manufacturing. A company that starts evaluation in month 18 of the program has less than six months to complete technical assessment before renegotiating a standard license. ### "Giving Away" Taxpayer-Funded IP? One possible criticism: waiving licensing fees and royalties undervalues government-owned intellectual property that taxpayers funded. The counterargument, reflected in the regulatory framework itself, is that practical application—not licensing revenue—is the primary goal of federal technology transfer. If charging fees means technology never gets commercialized, taxpayers get no return at all. 37 C.F.R. § 404.4 explicitly authorizes royalty-free licensing "as deemed appropriate in the public interest."[^33] The regulation treats revenue as one consideration among many, not the primary objective. ### Does "Free" Actually Help Startups? Another potential concern: fee waivers may advantage large companies with resources to evaluate hundreds of patents, while startups still face discovery costs, legal review expenses, and technical diligence requirements. The program attempts to address this through TechLink and Primary Intermediary Agreements that provide no-cost guidance. Whether this sufficiently levels the playing field remains to be tested. ### Governance and Consistency A practical challenge: defense labs have historically not maintained uniform licensing practices. Scaling a standardized "patent holiday" across 216 laboratories requires process harmonization. If different labs interpret CEL scope differently, or if some labs lack capacity to handle increased licensing volume, the program's friction-reducing benefits may be limited. ### Foreign Access and Technology Leakage A security consideration: making defense technology more accessible creates potential pathways for foreign exploitation. FOCI screening and export control compliance requirements aim to prevent this, but the balance between accessibility and security remains a policy tension. ### Measurement and Success Metrics A programmatic question: what counts as success? If the metric is "CELs signed," the program can appear successful without producing actual technology transfer. If the metric is "commercial products launched," that takes years to materialize and is difficult to attribute specifically to the Patent Holiday. These considerations don't undermine the program's legal foundation or invalidate its goals—they represent the practical and policy trade-offs inherent in any significant technology transfer reform. ## Key Takeaways 1. **The program is real.** Approximately 400 government-owned defense patents are available through two-year, royalty-free CELs. 2. **The legal foundation is solid.** Federal regulations at 37 C.F.R. § 404.4 explicitly authorize royalty-free licensing, using authority federal agencies have held for decades. 3. **Security vetting is mandatory.** FOCI screening and export control compliance are non-negotiable. If your ownership structure raises security concerns, address them before applying. 4. **The clock is ticking.** The two-year evaluation window is finite. Companies that wait too long to apply will have less time to evaluate technologies before standard licensing terms apply. 5. **Success depends on execution.** Whether the program works depends on whether the DoD can actually streamline discovery, standardize licensing, and handle increased volume across 216 labs. 6. **This is a pilot.** What happens after two years depends on whether the pilot demonstrates that fee waivers can meaningfully increase defense technology commercialization. ## What Practitioners Should Do **If you represent startups or non-traditional defense suppliers:** - Monitor the searchable database launch (TechLink is building it) - Identify patents relevant to your client's technology area - Budget for technical diligence and security screening even though the license is free - Plan the commercialization pathway before the evaluation period ends **If you represent prime contractors:** - Task tech scouting teams to review the holiday portfolio - Evaluate whether defense lab technologies can reduce internal R&D costs - Consider whether CELs could support small business subcontracting partnerships **If you're in-house counsel:** - Read the CEL terms carefully—"free" doesn't mean "without obligations" - Understand what happens at the two-year mark - Verify export control compliance requirements upfront - Track utilization reporting obligations ## Sources and Documentation [^1]: Pentagon Launches Patent Holiday for Defense Tech, *ExecutiveGov* (Jan. 23, 2026), https://www.executivegov.com/articles/pentagon-patent-holiday-no-fee-cel [^2]: Register for the Defense Patent Holiday Industry Day, *DoD Research & Engineering* (Jan. 2026), https://www.cto.mil/2026-defense-patent-holiday-industry-day/ [^3]: Pentagon announces 'patent holiday' to encourage productization, *Aerospace America* (Jan. 16, 2026), https://aerospaceamerica.aiaa.org/pentagon-announces-patent-holiday-to-encourage-productization/ [^4]: Air Force Patent Holiday Offers Businesses Inventions For Free, *Air & Space Forces Magazine* (Jan. 30, 2026), https://www.airandspaceforces.com/air-force-offers-patent-licenses-for-free/ [^5]: Air Force Patent Holiday, *supra* note 4. [^6]: Pentagon announces 'patent holiday', *supra* note 3. [^7]: Defense Patent Holiday Industry Day, *Vertx Partners* (Dec. 18, 2025), https://vertxpartners.org/event/defense-patent-holiday-industry-day/ [^8]: *Id.* [^9]: Defense Patent Holiday Industry Day, *supra* note 2. [^10]: 37 C.F.R. § 404.4 (2025), https://www.ecfr.gov/current/title-37/chapter-IV/part-404/section-404.4 [^11]: *Id.* [^12]: 35 U.S.C. § 209(a)(2) (2025), https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title35-section209 [^13]: 35 U.S.C. § 209(a)(4). [^14]: 35 U.S.C. § 209(b). [^15]: 35 U.S.C. § 209(d). [^16]: Pentagon Launches Patent Holiday, *supra* note 1. [^17]: National Institute of Standards and Technology, *Federal Laboratory Technology Transfer: Fiscal Year 2020 Summary Report to the President and Congress* 16 (2022), https://www.nist.gov/system/files/documents/2022/12/15/Federal%20Laboratory%20Technology%20Transfer%20Report_FY2020.pdf [^18]: The Technology Transfer Pathway from DoD Labs to Industry, *Defense Acquisition University Magazine* (Sept./Oct. 2024), https://www.dau.edu/library/damag/sept-oct2024/technologytransferpathway [^19]: Air Force Patent Holiday, *supra* note 4. [^20]: The Technology Transfer Pathway, *supra* note 18. [^21]: Fourteen MITRE Patents Available Through DoD Defense Patent Holiday, *MITRE* (Jan. 29, 2026), https://www.mitre.org/news-insights/impact-story/fourteen-mitre-patents-available-through-dow-defense-patent-holiday [^22]: Air Force Patent Holiday, *supra* note 4. [^23]: Pentagon Launches Patent Holiday, *supra* note 1. [^24]: *Id.* [^25]: Air Force Patent Holiday, *supra* note 4. [^26]: While specific FOCI requirements were not detailed in available program materials, standard DoD technology transfer practice requires export control compliance and security screening. See Technology Transfer, *DoD Research & Engineering* (June 13, 2025), https://rt.cto.mil/ddre-rt/science-and-technology-futures/tech-transfer/ (noting DoDI 5535.08 governs technology transfer). [^27]: Pentagon announces 'patent holiday', *supra* note 6. [^28]: *Id.* [^29]: *Id.* [^30]: *Id.* [^31]: Air Force Patent Holiday, *supra* note 4. [^32]: For the distinction between government-owned inventions (governed by 35 U.S.C. § 209) and subject inventions made with federal funding (governed by Bayh-Dole Act provisions including 35 U.S.C. § 203 march-in rights), see 37 C.F.R. § 404.1 (defining scope of licensing regulations for federally owned inventions). [^33]: 37 C.F.R. § 404.4. --- **About the Author** Paul Roberts is Senior IP Counsel at GEICO with over 20 years of patent law experience spanning the USPTO, elite law firms, the Department of Homeland Security, and Fortune 100 in-house practice. [Full bio](https://ip.modernpatentlaw.com/About+Paul+Roberts). **Contact:** [ip.modernpatentlaw.com/contact](https://ip.modernpatentlaw.com/Contact+and+Newsletters) **Disclaimer:** This analysis reflects publicly available information about the Defense Patent Holiday as of February 2026. Specific licensing terms and program details should be verified with DoD sources. Companies considering participation should consult with qualified IP counsel familiar with government licensing and export control requirements. This article does not constitute legal advice.