23 December 2020Copyright

Fed Circuit backs Boeing in data dispute with DoD

The US Court of Appeals for the Federal Circuit yesterday  sided with  Boeing in a dispute with the US Air Force over data disclosure.

The dispute centred on which party to a governmental contract has the right to disclose the data generated in fulfilment of that contract.

Boeing had entered into two contracts with the Air Force to provide work on the F-15 Eagle Passive/Active Warning Survivability System, which provides the Air Force with advanced electronic warfare technology to maximise the effectiveness and survivability of missions.

Under the terms of the agreement, Boeing “retains ownership” of the technical data that is generated by the work.

However, the contract also provides for the government to receive “unlimited rights” to the data, including the right to disclose the technical data “in whole or in part, in any manner, and for any purpose whatsoever”.

The contract additionally incorporates relevant US Department of Defense (DoD) regulations, including subsection 7013(f) of the Defense Federal Acquisition Regulations Supplement which strictly limits the ways in which a contractor can “assert restrictions” on the government’s rights.

Meanwhile, under US Code Title 10 section 2320, regulations such as the above cannot impair the right of either party with respect to the patents or copyright that they may hold in the technical data.

Upon providing the data to the government, Boeing included a copyright notice which specified that third party disclosure of the data required written approval.

The Air Force objected to this and Boeing rephrased its notice but, in 2017, the Air Force issued a final decision indicating that Boeing’s notice was not compliant with subsection 7013(f), as it asserted a restriction on the government’s rights.

Boeing appealed against the decision to the Armed Services Board of Contract Appeals. The aircraft manufacturer argued that subsection 7013(f) only prevents the restriction of the government’s rights, whereas Boeing was seeking to restrict the rights of third parties.

The Board rejected Boeing’s argument. It found that a notice of copyright restricts the government’s rights, which is not permitted by subsection 7013(f).

Boeing appealed against the decision and, yesterday, the Federal Circuit found that the Board erred in its interpretation of subsection 7013(f).

The court agreed with Boeing’s argument and said that it is the “only reasonable interpretation” of the subsection.

It explained: “Our interpretation of subsection 7013(f) allows Boeing a bare minimum of protection for the data, namely, the ability to notify the public of its ownership. A contrary interpretation would result in Boeing de facto losing all rights in any technical data it delivers to the government.”

The Federal Circuit, therefore, vacated and reversed the decision of the Armed Services Board of Contract Appeals, finding that subsection 7013(f) only prevents contractors from restricting the government’s rights; it is “silent” on those of non-governmental third parties.

“We remand the case to the Board for further proceedings consistent with this opinion,” the Federal Circuit concluded and awarded costs to Boeing.

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