Contractors May Mark Unlimited Rights Technical Data So Long as the Government’s Rights Are Not Impermissibly Restricted: A Study in Contrasts

The Boeing Company (Boeing) and the U.S. Air Force have settled their long-standing data rights marking dispute two years after the U.S. Court of Appeals for the Federal Circuit held that contractors may include restrictive markings on unlimited rights technical data as long as those markings do not restrict the Government’s rights.  A copy of the settlement agreement is attached to the Armed Services Board of Contract Appeals’ order of dismissal.

Under the settlement agreement, the Air Force agreed to accept noncommercial unlimited rights technical data with the following legend, which puts third parties on notice of Boeing’s “continuing ownership of such deliverables”:

Although the settlement is limited to this particular dispute, the Air Force’s acceptance of the legend to preserve the company’s rights vis-à-vis unauthorized third parties without compromising the Government’s unlimited rights suggests that a carefully drafted legend like the one included in the settlement agreement may be an acceptable marking for other contractors with similar concerns under their contracts with the Air Force (and even other agencies).  The key is to ensure that the marking does not impermissibly restrict the Government’s rights in the data, as further illustrated by the ASBCA’s November 29, 2022 decision in FlightSafety International, ASBCA No. 62659.  

In FlightSafety Int’l, the ASBCA found that the contractor’s “proprietary” legend and its copyright notice on commercial item “OMIT” data (data necessary for operation, maintenance, installation, or training) impermissibly restricted the Air Force’s unlimited rights to those data (notably, the parties did not dispute that the data were OMIT data, or that the Government was entitled to unlimited rights in the technical data).  The ASBCA highlighted the distinctions between the markings in the two appeals as follows:  “In Boeing, the contractor’s legend explicitly stated that it was a ‘non-US Government notice’ or warned that ‘Non-U.S. Government recipients may use and disclose only as authorized by Boeing or the U.S. Government.’  FlightSafety’s restrictive marking does not appropriately circumscribe the restrictions to third parties.  Thus, as written, the restrictive legend contradicts the Air Force’s license rights in the Contract and is not permissible.” (Internal citations omitted.)  The Board denied FlightSafety’s appeal.

Takeaways:

1. Unlimited rights technical data are to be delivered without restrictions on the Government’s rights 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.
2. So long as a contractor does not impermissibly restrict the Government’s rights, it may include a data rights legend on unlimited rights technical data that puts third parties on notice of its ownership of the data.