Last month, the U.S. Court of Appeals for the Federal Circuit’s (Federal Circuit) opinion in The Boeing Co. v. Secretary of the Air Force shed additional light on the technical data rights of contractors under defense contracts. The decision hinges on the fact that technical data provided by a contractor to the government remains the property of the contractor. Additionally, contractors retain certain rights in connection with technical data even when the government has so-called “unlimited rights” to use it.
In this case, Boeing held two contracts with the U.S. Air Force (USAF) for work on the F-15 Eagle Passive/Active Warning Survivability System. The contracts included the requirement for delivery of technical data to the USAF with Unlimited Rights and the DFARS 252.227-7013, non-commercial technical data rights clause (Subsection 7013). The parties did not dispute that Boeing retained ownership of technical data delivered to the USAF under the contracts, but Boeing contended that its legends on the technical data were intended to protect its rights as they pertained to third parties. Namely, putting third parties on notice of the proprietary nature of the data and directing that “Non-US Government Entities May Use and Disclose Only As Permitted In Writing By Boeing Or By The US Government.” The USAF rejected the data deliverables marked in this manner, finding them nonconforming and Boeing requested a final Contracting Officer’s decision on the matter.
The Contracting Officer’s final decision confirmed that the USAF was correct in rejecting the legends and directed Boeing to correct them. Boeing appealed the decision to the Armed Services Board of Contract Appeals (ASBCA) on the ground that Boeing’s legend was “not nonconforming” under Subsection 7013(f) since its legend did not address restrictions on government rights, only third-party rights. The ASBCA, ruling on the motion for summary judgment, disagreed, siding with the USAF’s position that only the legends listed in Subsection 7013(f) are authorized and Boeing’s legend was not one of those. Boeing appealed this decision to the Federal Circuit.