The Boeing Company v. Air Force (Fed. Cir. 2020)
This is a government contract case involving rights to technical data provided to the government from a contractor. Boeing is working on a multi-billion-dollar F-15 Eagle Passive/Active Warning Survivability System (EPAWSS) project subject to a DoD contract. Under the contract, Boeing “retains ownership” of the technical data it generates and delivers. However, the U.S. Gov’t receives also “unlimited rights” to the data, including the right to “use, modify, reproduce, perform, display, release, or disclose [the] technical data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.”
When Boeing began providing data, it included first notice below. The U.S. Gov’t. objected to that language and Boeing offered the second alternative. Still though the U.S. Gov’t. objected as out of compliance with the DoD regulations. (DFARS 252.227-7013(f)). This objection apparently came as something of a surprise — Boeing says that it has been marking its technical data with propriety legends since 2002.
Boeing wanted to retain its limitations on use and further disclosure by “Non-U.S. Government recipients” and so petitioned to the Armed Services Board of Contract Appeals (ASBCA). After losing, Boeing brought its appeal to the Federal Circuit. On appeal here, though the Federal Circuit has reversed.
This is a contract dispute that focuses on the DoD regulations because they were incorporated into the contract. The regulations strictly limit they ways that a Contractor can “assert restrictions on the [US] Government’s right[s].” Here, the Federal Circuit drew a fine-point — finding that Boeing’s restrictions are expressly designed to restrict only non-US-Governmental parties. Although the regulations state that “All other markings are nonconforming markings,” the court held that that statement as only applying to markings that restrict US governmental rights.
Thus, we agree with Boeing that Subsection 7013(f) … is silent on any legends that a contractor may mark on its data when it seeks to restrict only the rights of non-government third parties.
Anyone savvy will note that if the US government has “unlimited rights,” then those rights would include the full right to release, disclose, our otherwise authorize a third-party to use the data. Boeing’s modified proposal takes this into account — stating that third-parties use must be authorized either by Boeing or the U.S. Gov’t. However, the Gov’t still argues that its rights are being restricted because it requires the Government to be the “authorizer” — something potentially quite burdensome and “inconsistent with its unlimited rights.” On remand, the Board may consider this issue.
In its decision, the Federal Circuit walks through a set of light policy arguments as well:
Boeing asserts that the Board’s interpretation of Subsection 7013(f) will have far-reaching consequences that will impair contractors’ abilities to protect their rights in their technical data and threaten the willingness of technology innovators to do business with the government. The government responds that allowing contractors unbridled freedom to mark technical data with self-created legends of their choosing is inconsistent with the DFARS and would encumber unrestricted information with unclear markings that make it difficult for the government to exercise its license rights.
To be clear, neither party presents any policy arguments that would be sufficient to overcome the plain language of Subsection 7013(f), as explained above. In any event, we decide this case on the regulation, not policy. … But our interpretation of the plain language of Subsection 7013(f) has the added benefit of alleviating some of Boeing’s policy concerns.
Technical Data Rights: The underlying question, of course, is what rights are we talking about? The US does not have a category of property rights known as “technical data rights.” The best data protection may be trade-secret rights, but that does not seem to work here because we’re talking about data that has been turned over to another party without any restriction. Boeing’s copyright notice is probably the best-clue. However, copyright protection in a document is a far-cry being the “owner” of the technical data as the court discussed.