Intellectual Property Lawyers

Intellectual Property lawyers: The defence and security sector

The Importance of IP contracting

The UK government have announced that defence spending will rise to 2.7% of GDP by 2027. The largest investment in defence since the cold war. The government hopes this will bolster national security in a time of intensifying geopolitical conflicts. Significant amounts of this investment will go into R&D, backing British companies to be the leaders in defence technology on the global stage. (View Here)

Intellectual property (IP) is a critical component in the defence sector, functioning as a key driver of innovation for commercial entities engaged in the development of advanced technologies. The ability to secure and protect IP rights not only incentivises investment in research and development but also enhances the commercial value and strategic positioning of the resulting technologies.

UK policy and MOD approach

MOD contracts tend to be built around standard boilerplate contractual conditions (DEFCONs). The standard DEFCONs for IP allows contractors to retain ownership of foreground IP while securing licensing rights for government use. This balances the dual concerns of promoting private innovation and military operational independence.

How the UK government approaches IP in defence

The UK Government treats intellectual property (IP) in the defence sector as a strategic asset, balancing innovation and commercial engagement with national security priorities. The MOD often maintains tighter control over IP than other departments to safeguard sensitive capabilities and ensure operational readiness. This creates a complex environment for contractors and suppliers, making expert legal support vital to structuring compliant, commercially viable agreements.

A key policy document shaping this approach is the Digital, Data and Technology Playbook, which sets standards for procuring digital capabilities and managing IP in defence innovation. As the MOD shifts toward more agile, tech-enabled procurement, companies must structure contracts that protect their IP while aligning with MOD requirements. Proelium Law advises clients across all aspects of technology agreements, licensing strategies, and MOD-specific IP frameworks in high-risk sectors such as defence.

With increased defence spending and a growing emphasis on flexible procurement, opportunities for smaller and more innovative companies are expanding — but so too is the legal complexity. Whether you’re developing dual-use AI, cybersecurity tools, or digital infrastructure, Proelium Law helps ensure your IP is protected, contract terms are balanced, and MOD expectations are clearly met.

Key IP principles in MOD contracts

MOD contracts follow a defined IP regime in which foreground IP — created during a contract — is typically owned by the supplier, while the MOD retains broad licensing rights. These rights allow the MOD to use, modify, and share the IP across government and allied agencies, often without further compensation. This structure supports defence interoperability and long-term sustainability.

Foreground and background IP distinctions are central to MOD contracts. While foreground IP — created during the course of a contract — is often retained by the supplier with licensing rights granted to the MOD, background IP (pre-existing IP) is generally protected and remains with its original owner. However, recent developments suggest the MOD is increasingly seeking greater access to, or control over, certain background IP and hybrid innovations, particularly in strategic areas like AI, cyber, and dual-use technologies. This shift reflects a growing emphasis on long-term sovereign capability and reduced reliance on external vendors, making IP negotiation more complex and high-stakes.

Contracts also include stringent requirements around technical data and documentation to ensure supportability and future development. Contractors must navigate these terms carefully to preserve the commercial value of their IP, particularly when negotiating deliverables and rights to reuse.

Additionally, MOD contracts often mandate IP access provisions for subcontractors, requiring prime contractors to secure appropriate rights from third parties. This adds complexity in managing supply chains and contractual risk. Proelium Law works closely with clients to review and draft these clauses, ensuring innovation is protected and compliance is maintained — a key concern for SMEs and tech-led businesses in the defence sector.

Key DEFCON clauses on IP

DEFCON 14 – MOD may claim rights over inventions and designs created under contract.
DEFCON 15 – Contractors must declare pre-existing (background) IP used in the contract.
DEFCON 90 – MOD gets wide rights to use copyright materials delivered.
DEFCON 91 – Sets rules on MOD use and licensing of software developed in the contract.
DEFCON 703 – Contractor owns IP, MOD gets usage rights.
DEFCON 705 – Covers IP in research and tech contracts; allows MOD use and development.
DEFCON 707 – MOD owns all IP created; full control over use and licensing.

For more information visit on DEFCONS visit gov.uk

Contracting with other defence contractors and manufacturers

Whilst the MOD has a general approach to IP as explained above, when contracting within the supply chain it is not uncommon for one contractor to seek to obtain the IP created by another contractor in the design and supply of products. When initially faced with such clauses in contract can be daunting to navigate and often the lead contractor thinks this is a flow down requirement of the MOD or indeed a prime. This is usually not the case and there is either a mistake in interpretation or genuine attempt to obtain the IP of contractor within the supply chain.

What contractors should do

Secure clear IP terms early, know your DEFCON obligations, and don’t accept unfavourable clauses without challenge. Proelium Law helps you negotiate stronger positions and protect your rights from day one.