Key Takeaway(s): Companies receiving federal funding and assistance, for example in connection with the FAA’s AI-supported system, should be aware of the requirement to include a statement of government support in patent applications, the government reporting obligations, and the potential ramifications for omitting a statement of government support and non-compliance with the reporting. Further, patent applicants should strongly consider filing patent applications prior to receiving federal funding and assistance.
On September 21, 2026, the U.S. Department of Transportation (USDOT) and the Federal Aviation Administration (FAA) announced the roll out of the Strategic Management of Airspace, Routes and Trajectories (SMART) tool which is described as “a cutting-edge tool that centralizes 200 data streams – including weather patterns, flight paths, traffic flow, and controller staffing metrics – into one platform.” The rollout of SMART has begun in a limited manner, starting in and around Washington, DC. The SMART fact sheet is available here.
U.S. Transportation Secretary, Sean P. Duffy, stated:
“By fundamentally reshaping how we manage our airspace and preventing problems before they happen, SMART will slash those frustrating delays, reduce stress on air traffic controllers, and lower travel prices.”
The FAA announcement explains that SMART addresses the current disruptions experienced by “moving the FAA from a reactive approach to a predictive one.” SMART is intended to use “data to help the FAA anticipate demand, weather and airspace constraints and plan hours, days and even weeks ahead.”
Back in June 2026, Air Space Intelligence (ASI), was awarded an $875 Million contract by the FAA to assist in modernizing the national airspace system. The FAA’s announcement confirms “USDOT and the FAA partnered with ASI to build a state-of-the-art air traffic center to facilitate [the] staged rollout of SMART over the next few months.” ASI’s website describes ASI as providing “industry-proven AI for mission-critical operations.”
The FAA’s contract with ASI illustrates a common scenario for technology companies: significant federal funding that can accelerate development but also carries important intellectual property implications.
For example, patent applicants receiving federal funding, such as the contract awarded to ASI by the FAA, should take into consideration the timing of when they file patent applications and the necessary requirements for complying with the Bayh-Dole Act.
The Bay-Dole Act provides guidance for patent rights in inventions made with federal assistance. Under the Bayh-Dole Act, patent applications related to technology being developed and supported by federal funding may require a statement of government support indicating the government has certain rights in the invention. Failure to include a statement of government support may risk the loss of patent rights.
Further, the Bayh-Dole Act includes government reporting obligations and failure to comply with the government reporting obligations can result in the forfeiture of patent rights.
Patent applicants should also strongly consider filing patent applications prior to receiving federal funding and support. By filing a patent application first, it helps protect the IP and the application in some instances may not be subject to the requirements of the Bayh-Dole Act. Subsequent patent applications can then be filed to protect further developments supported by the government funding. However, the subsequent applications may be subject to the requirements under the Bayh-Dole Act.
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