B-138638, DEC. 2, 1959

B-138638, DEC. 2, 1959

TO THE UNIVERSAL TARGET COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 29, 1959, REQUESTING FURTHER CONSIDERATION OF OUR DECISIONS OF APRIL 6 AND SEPTEMBER 2, 1959, WHEREIN IT WAS HELD THAT THE DEPARTMENT OF THE AIR FORCE HAD ACQUIRED UNLIMITED RIGHTS IN THE DRAWINGS AND DATA SECURED UNDER CONTRACTS NOS. AF 42 (600/-18817 AND 19582.

RECONSIDERATION IS REQUESTED ON THE BASIS THAT WE MAY HAVE OVERLOOKED YOUR CONTENTION AS TO THE LEGAL EFFECT OF CLAUSE 42, EVEN IF SUCH CLAUSE WAS A PART OF THE CONTRACT, SINCE IT WAS STATED IN THE DECISION OF SEPTEMBER 2 THAT "IT DID NOT APPEAR THAT YOU (UNIVERSAL) QUESTIONED THE FACT THAT THE GOVERNMENT HAD THE RIGHT TO USE THE DATA IF SUCH SAID CLAUSE WAS A PART OF THE CONTRACT, ALTHOUGH IT WAS YOUR CONTENTION THAT YOU DID NOT INTEND TO GRANT RIGHTS IN THE DATA.'

THE ABOVE QUOTED STATEMENT FROM THE DECISIONS OF SEPTEMBER 2 WAS MERELY INTENDED TO EXPLAIN WHY THE DECISION OF APRIL 6 WAS SUBSTANTIALLY DEVOTED TO THE QUESTION AS TO WHETHER CLAUSE 42, RIGHTS IN DATA-UNLIMITED, WAS OR WAS NOT A PART OF THE CONTRACT.

WITH RESPECT TO THE QUESTION AS TO WHETHER THE GOVERNMENT ACQUIRED THE RIGHT TO USE THE DATA OBTAINED, IT WAS STATED:

"UNDER THE TERMS OF CONTRACT AF 42 (600-18817, YOU AGREED TO FURNISH 300 DART TARGET KITS, TYPE UTC K-11, ITEM NO. 1; MAINTENANCE INSTRUCTION BOOKLETS, ITEM NO. 1.A; AND "ORIGINAL ENGINEERING DATA" ON ITEM 1 ABOVE, ITEM 1.B.

"A PROPERTY RIGHT IN PROPRIETARY INFORMATION HAS BEEN RECOGNIZED BY THE COURTS ON NUMEROUS OCCASIONS. THE DISCOVERER OF SUCH DATA OR INFORMATION, WHETHER PATENTABLE OR NOT, MAY RESTRICT THE USE OF HIS DISCOVERY TO SUCH PERSONS AS HE MAY SELECT AND ON SUCH TERMS AND CONDITIONS AS HE ELECTS TO IMPOSE, PROVIDED THE INFORMATION IS KEPT SECRET FROM ALL PERSONS EXCEPT THOSE HAVING A CONTRACTUAL OR A CONFIDENTIAL RELATIONSHIP WITH HIM IN REGARD TO THE INFORMATION. AMERICAN DIRIGOLD CORPORATION V. DIRIGOLD METALS CORPORATION, 125 F.2D 446, 452. THE COURTS WILL PREVENT THE UNLAWFUL USE OF SUCH INFORMATION WITHOUT PERMISSION OF THE OWNER PROVIDED THE SECRET IS KEPT AS INDICATED ABOVE. NELSON V. COMMISSIONER OF INTERNAL REVENUE, 203 F.2D 1. DISCLOSURE OF THE INFORMATION TO ANOTHER PARTY UNDER A CONTRACT IMPOSING AN OBLIGATION TO PRESERVE ITS SECRECY DOES NOT CONSTITUTE PUBLIC DISCLOSURE BY THE OWNER OF THE INFORMATION SUCH AS TO INVALIDATE THE PROPERTY RIGHT. DARSYN LABORATORIES V. LENOX LABORATORIES, 120 F.SUPP. 42, AFFIRMED 217 F.2D 648, CERTIORARI DENIED, 349 U.S. 921.

"UNDER THE CONTRACTS YOU AGREED TO AND APPARENTLY DID FURNISH ORIGINAL ENGINEERING DATA WHICH WAS DEFINED AS INCLUDING OPERATIONAL, DESIGN, AND PROPRIETARY DATA. THERE WERE NO CONDITIONS WHATSOEVER PLACED UPON THE GOVERNMENT'S USE OF THE DATA ACQUIRED. RATHER, CLAUSE 42 OF THE CONTRACT SPECIFICALLY PROVIDED THAT, SUBJECT TO CERTAIN RESTRICTIONS,"THE GOVERNMENT MAY DUPLICATE, USE AND DISCLOSE IN ANY MANNER AND FOR ANY PURPOSE WHATSOEVER, AND HAVE OTHERS SO DO, ALL SUBJECT DATA DELIVERED UNDER THIS CONTRACT.'

"IN SUCH CIRCUMSTANCES, IT APPEARS CLEAR THAT THE GOVERNMENT HAD THE RIGHT TO USE THE DATA ACQUIRED UNDER THE PRIOR CONTRACTS TO EFFECT SUBSEQUENT PROCUREMENTS OF THE TOW TARGETS BY FORMAL ADVERTISING. ACCORDINGLY, THERE IS NO LEGAL BASIS TO MODIFY THE CONCLUSION REACHED IN THE DECISION OF APRIL 6, 1957.'

WE BELIEVE THIS PORTION OF THE DECISION CLEARLY INDICATES THAT WE HAD, AND WE NOW HAVE, NO DOUBT AS TO THE GOVERNMENT'S REPRODUCTION RIGHTS UNDER THE CONTRACT AS A WHOLE.

WITH RESPECT TO THE CONTENTION MADE IN YOUR LETTER OF OCTOBER 2, 1959, CONCERNING THE PERFORMANCE OF THE CONTRACTOR WHO RECEIVED THE AWARD UNDER INVITATION FOR BIDS NO. 42-600-59-92, YOU ARE ADVISED THAT THE RIGHTS AND LIABILITIES OF THAT CONTRACTOR ARE FOR DETERMINATION UNDER THE CONTRACT EXISTING BETWEEN IT AND THE GOVERNMENT. WE ARE NOT FULLY AWARE OF THE CONDITIONS OR PROGRESS BEING MADE UNDER THE CONTRACT. HOWEVER, AS YOU WERE ADVISED IN DECISION OF SEPTEMBER 2, OUR FIELD REPRESENTATIVES HAVE BEEN INSTRUCTED TO CALL TO THE ATTENTION OF PROPER AUTHORITIES ANY IMPROPER DEVIATIONS FROM THE TERMS OF THE CONTRACT.