B-156134, B-156151, B-156174, B-156231, B-156762, B-157974, OCT. 25, 1966

B-156134,B-156174,B-157974,B-156151,B-156231,B-156762: Oct 25, 1966

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TO CANADIAN COMMERCIAL CORPORATION: REFERENCE IS MADE TO PROTESTS FILED BY RADIO ENGINEERING PRODUCTS LIMITED (REP) AND CONCURRED IN BY CANADIAN COMMERCIAL CORPORATION (CCC) WITH REGARD TO THE ACTIONS OF THE UNITED STATES ARMY MATERIEL COMMAND (AMC) IN IMPROPERLY DISCLOSING DATA ALLEGED TO HAVE BEEN PROPRIETARY TO REP AND WHICH HAD BEEN FURNISHED UNDER CONTRACT TO THE GOVERNMENT WITH ONLY LIMITED RIGHTS OF USE. SIX PROTESTS WERE FILED WITH THIS OFFICE. IT WAS AGREED BY THE PARTIES CONCERNED THAT A TEST CASE WOULD BE SUBMITTED TO OUR OFFICE FOR DETERMINATION. WAS CHOSEN AS THE TEST CASE SINCE IT WAS UNDER THIS CONTRACT THAT THE GOVERNMENT ACQUIRED THE REP DRAWINGS LATER USED IN COMPETITIVE PROCUREMENTS AND IT IS THEREFORE THE INTERPRETATION OF THIS CONTRACT WHICH WILL GOVERN WHETHER THE REP DRAWINGS WERE FURNISHED TO THE GOVERNMENT WITH LIMITED OR UNLIMITED RIGHTS OF USE.

B-156134, B-156151, B-156174, B-156231, B-156762, B-157974, OCT. 25, 1966

TO CANADIAN COMMERCIAL CORPORATION:

REFERENCE IS MADE TO PROTESTS FILED BY RADIO ENGINEERING PRODUCTS LIMITED (REP) AND CONCURRED IN BY CANADIAN COMMERCIAL CORPORATION (CCC) WITH REGARD TO THE ACTIONS OF THE UNITED STATES ARMY MATERIEL COMMAND (AMC) IN IMPROPERLY DISCLOSING DATA ALLEGED TO HAVE BEEN PROPRIETARY TO REP AND WHICH HAD BEEN FURNISHED UNDER CONTRACT TO THE GOVERNMENT WITH ONLY LIMITED RIGHTS OF USE.

IN ALL, SIX PROTESTS WERE FILED WITH THIS OFFICE. HOWEVER, BECAUSE OF THE COMPLEX NATURE OF THE CASES AND THE FACT THAT THE SIX PROTESTS ALL RESULTED FROM THE SAME ACQUISITION OF DATA BY THE GOVERNMENT, IT WAS AGREED BY THE PARTIES CONCERNED THAT A TEST CASE WOULD BE SUBMITTED TO OUR OFFICE FOR DETERMINATION. ACCORDINGLY, ALTHOUGH ALL SIX PROTESTS CONCERNED THE IMPROPER DISCLOSURE OF DATA TO NON GOVERNMENT SOURCES ON 1965 PROCUREMENTS, THE ALLEGED MISUSE OF DATA UNDER CONTRACT NO. DA 36-039 SC-83881, ORDER NO. 19143-PM-59-93-93, DATED JANUARY 7, 1959, HEREAFTER REFERRED TO AS CONTRACT -83881, WAS CHOSEN AS THE TEST CASE SINCE IT WAS UNDER THIS CONTRACT THAT THE GOVERNMENT ACQUIRED THE REP DRAWINGS LATER USED IN COMPETITIVE PROCUREMENTS AND IT IS THEREFORE THE INTERPRETATION OF THIS CONTRACT WHICH WILL GOVERN WHETHER THE REP DRAWINGS WERE FURNISHED TO THE GOVERNMENT WITH LIMITED OR UNLIMITED RIGHTS OF USE.

CONTRACT -83881 WAS FOR ELECTRICAL CONNECTORS AND TELEPHONE CABLE. MUTUAL AGREEMENT, HOWEVER, THIS PROTEST IS LIMITED TO DATA (DRAWINGS) ACQUIRED ON U-185 ( ( (G, U-186 ( ( (G, AND U-187 ( ( (G CONNECTORS. THE VARIOUS SUBMISSIONS OF REP PROVIDE DETAILED DESCRIPTIONS OF THE NATURE OF THESE CONNECTORS AND THEIR HISTORY IN ORDER TO SHOW THEIR PROPRIETARY NATURE. THE REP SUBMISSIONS ALSO OUTLINE EACH INSTANCE IN WHICH THE CONNECTORS WERE DISCUSSED WITH REPRESENTATIVES OF AMC, OR DRAWINGS THEREOF WERE FURNISHED TO AMC PRIOR TO THE DATE OF CONTRACT -83881, AND ALLEGE THAT THE PROPRIETARY NATURE OF THE CONNECTORS WAS ACKNOWLEDGED BY AMC AND PROTECTED BY REP DURING THIS TIME. ALLEGATIONS ARE ALSO MADE THAT DATA SUBMITTED ON THE SUBJECT CONNECTORS WERE IMPROPERLY DISCLOSED BEFORE THE AWARD OF THE SUBJECT CONTRACT. HOWEVER, THESE ALLEGATIONS HAVE BEEN APPARENTLY ABANDONED IN FAVOR OF THE POSITION THAT THE DATA WERE WRONGFULLY ACQUIRED AND DISCLOSED UNDER CONTRACT -83881. THE REPORT SUBMITTED TO THIS OFFICE BY AMC CONCERNS ITSELF SOLELY WITH THE CONTRACT ENTERED INTO BETWEEN CCC AND THE GOVERNMENT COVERING CONTRACT -83881 AND CONTENDS THAT PROPRIETARY RIGHTS IN THE CONNECTORS WERE NOT RESERVED BY CCC AND REP UNDER THE TERMS OF THAT CONTRACT. FOR THE PURPOSES OF THIS DECISION, THEREFORE, IT WILL BE ASSUMED THAT THE PROPRIETARY NATURE OF THE CONNECTORS WAS PROTECTED UP TO THE TIME SUCH CONTRACT WAS CONSUMMATED.

THE GROUNDS OF THE PROTEST, BRIEFLY, ARE THAT REP AND CCC PROTECTED THEIR PROPRIETARY RIGHTS IN THE CONNECTORS THROUGH TELEGRAMS AND LETTERS RECEIVED BY THE CONTRACTING OFFICER BEFORE AWARD AND SPECIFICALLY REFERRED TO IN THE NOTICE OF AWARD ON CONTRACT -83881, AND THAT THE NOTICES OF AWARD EVIDENCED THE INTENT OF THE PARTIES AND CONSTITUTED THE CONTRACT BETWEEN THEM THEREBY OVERRIDING ANY LATER, FORMAL CONTRACT LANGUAGE TO THE CONTRARY.

THE AMC REPORT, ON THE OTHER HAND, CONTENDS THAT THE CONSISTENTLY MANIFESTED INTENT OF THE GOVERNMENT WAS TO ACQUIRE UNLIMITED RIGHTS IN THE DRAWINGS IN ISSUE, AND THAT THIS INTENT IS EVIDENCED BY STANDARD UNLIMITED RIGHTS IN DATA CLAUSES (ARMED SERVICES PROCUREMENT REGULATION (ASPR) SECTION IX, PART 2, REV. NO. 38, OCTOBER 15, 1958) CONTAINED BOTH IN THE RFQ AND THE FORMAL CONTRACT, AND BY THE FACT THAT SPECIFIC ITEMS OF PROPRIETARY DATA WERE CALLED FOR IN THE RFQ BUT WERE NOT INCLUDED IN THE CCC QUOTATION. THE AMC REPORT FURTHER POINTS OUT THAT THE RESERVATIONS OF PROPRIETARY RIGHTS BY REP BY MEANS OF TELEGRAM AND LETTER ARE NOT CONTROLLING BECAUSE THESE RESERVATIONS WERE INTENDED BY BOTH PARTIES TO APPLY TO PATENT RIGHTS RATHER THAN RIGHTS IN PROPRIETARY DATA AND, THEREFORE, WERE INTENDED ONLY TO PUT THE GOVERNMENT ON NOTICE OF POSSIBLE FUTURE PATENT INFRINGEMENT CLAIMS. AMC EXPRESSES THE OPINION THAT, IN ANY EVENT, THE BARE RESERVATION WOULD NOT BE ENOUGH TO PROTECT RFP'S PROPRIETARY RIGHTS SINCE ASPR 9 203.3 (REV. NO. 38) REQUIRED THAT ALL PROPRIETARY DATA BE STAMPED WITH A RESTRICTIVE LEGEND IF IT IS TO RETAIN ITS PROPRIETARY CHARACTER. THE AMC REPORT ALSO STATES THAT "THE "PRACTICAL INTERPRETATION" WHICH CCC AND REP GAVE TO THE CONTRACT, THROUGH THEIR ACTIONS OR INACTIONS DURING THE PERFORMANCE OF THE CONTRACT, STRONGLY INDICATES THAT THEY CONSIDERED THE CONTRACT TO PROVIDE UNLIMITED RIGHTS TO THE GOVERNMENT IN THE DRAWINGS," CITING GLANCHARD V. UNITED STATES, 347 F.2D 268.

IN AN ALTERNATIVE ARGUMENT, AMC CONTENDS THAT THE FORMAL CONTRACT "SUPERSEDED" THE NOTICE OF AWARD AND THAT SINCE THE FORMAL CONTRACT CONTAINED THE STANDARD ASPR UNLIMITED RIGHTS CLAUSES, THE RESERVATIONS OF PROPRIETARY PROTECTION WERE NO LONGER PART OF THE CONTRACT AND ARE NOT FOR CONSIDERATION.

THERE SEEMS TO BE LITTLE QUESTION THAT A NOTICE OF AWARD CONSUMMATES A BINDING CONTRACT BETWEEN THE PARTIES, THEREBY FIXING THE RESPECTIVE RIGHTS AND LIABILITIES, AND THAT ANY LATER, FORMAL CONTRACT, OF NECESSITY, MUST CONFORM TO THE NOTICE OF AWARD. THE ATTORNEY FOR REP MADE THIS POINT IN A LETTER DATED MARCH 14, 1966, TO AMC, AND CITED THREE DECISIONS OF OUR OFFICE AS AUTHORITY, EMPHASIZING DECISION B-80263, SEPTEMBER 28, 1948, AS APPLYING THIS PRINCIPLE TO NEGOTIATED PROCUREMENTS. THE AMC REPORT ATTEMPTS TO DISTINGUISH BETWEEN ADVERTISED AND NEGOTIATED PROCUREMENTS IN THIS AREA AND MAINTAINS THAT THE ABOVE-CITED DECISION, WHILE INVOLVING A NEGOTIATED PROCUREMENT, TURNS ON THE QUESTION OF MUTUAL MISTAKE AND IS NOT FOR APPLICATION. WHILE THAT DECISION DID INVOLVE THE QUESTION OF MUTUAL MISTAKE, ON PAGE 4 OF THE DECISION THE FOLLOWING STATEMENT WAS MADE:

"ASIDE FROM THE FACT THAT A MUTUAL MISTAKE APPARENTLY WAS MADE IN THE PREPARATION OF THE FORMAL CONTRACT, IT SEEMS CLEAR THAT THE GOVERNMENT'S LETTER OF MAY 28, 1948, NOTIFYING THE CONTRACTOR OF AWARD OF CONTRACT IN ACCORDANCE WITH ITS WRITTEN PROPOSAL OF APRIL 30, 1948, CONSUMMATED A VALID AND BINDING CONTRACT, EVEN THOUGH IT WAS CONTEMPLATED THAT A FORMAL CONTRACT WOULD BE EXECUTED AT A LATER DATE. SEE GARFIELDE V. UNITED STATES, 93 U.S. 242; UNITED STATES. V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88; UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; WATERS V. UNITED STATES, 75 C.CLS. 126. * * *"

THE ESSENCE OF A CONTRACT IS THE AGREEMENT BETWEEN THE PARTIES, AND THE FORMAL, WRITTEN CONTRACT DOCUMENT IS MERELY A RECORD OF THAT AGREEMENT. CLEARLY THE PARTIES CANNOT AGREE TO CERTAIN STIPULATIONS IN THEIR NEGOTIATIONS, REFERRING TO THOSE STIPULATIONS IN THE NOTICE OF AWARD, AND HAVE THAT AGREEMENT NULLIFIED BY THE UNILATERAL INSERTION OF CONTRARY LANGUAGE IN THE FORMAL CONTRACT. FOR THESE REASONS, WE BELIEVE THAT THE FORMAL WRITTEN CONTRACT MUST AGREE WITH THE TERMS AND CONDITIONS CONTAINED IN THE NOTICE OF AWARD. THEREFORE, IT IS OUR VIEW THAT RESOLUTION OF THESE PROTESTS IS GOVERNED BY THE LEGAL EFFECT OF THE TELEGRAM AND LETTERS ALLEGEDLY RESERVING RIGHTS IN PROPRIETARY DATA AND REFERRED TO IN THE NOTICE OF AWARD.

A REVIEW OF THE REQUEST FOR QUOTATIONS UPON WHICH CONTRACT -83881 WAS BASED SHOWS THAT ITEMS 1, 7, AND 13 OF THE SCHEDULE CALLED FOR THE SUBJECT CONNECTORS; ITEMS 3, 9, AND 15 CALLED FOR PRODUCTION DRAWINGS OF THE CONNECTORS IN ACCORDANCE WITH THE APPLICABLE MILITARY SPECIFICATIONS WHEREUNDER UNLIMITED RIGHTS WOULD BE CONVEYED TO THE GOVERNMENT AND ITEMS 22, 23, AND 24 CALLED FOR PROPRIETARY DATA:

"* * * CONCERNING THE * * * TRADE SECRETS AND MANUFACTURING PROCESSES WHICH ARE NOT DISCLOSED BY THE DESIGN ITSELF, AND WHICH, WHEN COUPLED WITH THE PRODUCTION DRAWINGS BEING PROCURED UNDER * * * (ITEMS 3, 9, AND 15) * * * WILL ENABLE ANOTHER CONTRACTOR TO MANUFACTURE EQUIPMENTS IDENTICAL TO * * * (ITEMS 1, 7, AND 13).'

SPECIAL NOTE 1 OF THE SCHEDULE CALLED FOR REPRODUCIBLE SEPIA TYPE DRAWINGS AND SPECIFICATIONS FOR EACH OF THE THREE CONNECTORS. REP DID NOT FURNISH ANY "PROPRIETARY DATA" AS DEFINED IN ITEMS 22, 23, AND 24 OF THE RFQ, STATING INSTEAD OPPOSITE THOSE ITEMS IN ITS PROPOSAL THAT NO PROPRIETARY DATA WERE REQUIRED BECAUSE THE PRODUCTION DRAWINGS AND THE DRAWINGS CALLED FOR IN SPECIAL NOTE 1 COVERED "ALL INFORMATION KNOWN TO REP" ON THE CONNECTORS. REP CONTENDS THAT THIS STATEMENT WAS NOT INTENDED TO INDICATE THAT NO PROPRIETARY DATA WAS INVOLVED, BUT MERELY THAT THERE WAS NO SEPARATE PROPRIETARY DATA AS DEFINED IN THE RFQ BECAUSE THE PRODUCTION DRAWINGS AND THE SPECIAL NOTE 1 DRAWINGS CONTAINED ALL INFORMATION KNOWN TO REP ON THE CONNECTORS.

ON DECEMBER 19, 1958, AT THE TIME THE CCC-REP QUOTATION WAS SUBMITTED, A MEETING ATTENDED BY REPRESENTATIVES OF REP, CCC, AND AMC WAS HELD. THE NATURE OF THE RIGHTS BEING CONVEYED TO THE GOVERNMENT WAS DISCUSSED, AND IT WAS THIS MEETING WHICH PROMPTED THE SUBMISSION OF THE FOLLOWING TELEGRAM FROM REP, WHICH WAS CONFIRMED BY A LATER TELEGRAM DATED JANUARY 7, 1959, AND LETTER FROM CCC, TO THE CONTRACTING OFFICER:

"* * * PLEASE ADD FOLLOWING STATEMENT TO OUR PROPOSAL SUBMITTED 19 DEC 58 THROUGH CANADIAN COMMERCIAL CORPORATION ON ORDER 19143 QUOTE NOT WITHSTANDING ANYTHING CONTAINED ELSEWHERE IN THIS PROPOSAL WE DO NOT INCLUDE IN OUR OFFER PROPRIETARY RIGHTS TO DESIGNS, INVENTIONS OR PATENT APPLICATIONS PERTAINING TO THE ARTICLES ON WHICH WE HAVE QUOTED STOP FULL INFORMATION ON THESE ARTICLES IS CONTAINED IN THE PRODUCTION DRAWINGS WHICH ARE OFFERED STOP THESE DRAWINGS WOULD PERMIT MANUFACTURE BY A COMPANY OTHER THAN OURSELVES ONLY IF ACCOMPANIED BY A LICENSE COVERING PROPRIETARY RIGHTS STOP WE ARE NOT IN PROCESS OF NEGOTIATING SUCH A LICENSE ON AN EXCLUSIVE BASIS WITH AN AMERICAN COMPANY NOT OTHERWISE CONNECTED WITH US TO BE EFFECTIVE FOR PROCUREMENTS SUBSEQUENT TO ORDER 19143 STOP THIS TELEGRAM CONFIRMS THE DISCUSSION IN YOUR OFFICE ON DEC 19 58 WITH YOURSELF, MR ASPDEN, MR BENNETT AND OTHERS UNQUOTE COPY OF THIS TELEGRAM SENT TO MR ASPDEN, ST FISHER. UNQUOTE. * * *.'

THIS WAS THE TELEGRAM REFERRED TO IN THE NOTICE OF AWARD WHICH ALLEGEDLY RESERVED REP'S PROPRIETARY DATA RIGHTS IN THE CONNECTORS. THE TELEGRAM WAS INTERPRETED BY AMC AS REFERRING TO PATENT RIGHTS RATHER THAN TO PROPRIETARY RIGHTS AND, FOR THAT REASON, NO RESTRICTIONS ON DISCLOSURE OF THE DATA WERE OBSERVED. THE AMC INTERPRETATION IS EVIDENCED BY A MEMO FROM MR. M. A. BENNETT, AMC PATENT ATTORNEY, CONCERNING THE DECEMBER 19, 1958, MEETING AND THE ABOVE TELEGRAM. THE MEMO READS AS FOLLOWS:

"1. THE SOLICITATION CALLED FOR THREE (3) ITEMS OF PROPRIETARY DATA.

"2. IN THE MEETING WITH RADIO ENGINEERING PRODUCTS AND CANADIAN COMMERCIAL CORP. HELD AT LPSO ON 19 DECEMBER 1958, MR. FISHER STATED THAT RADIO ENGINEERING PRODUCTS HAS NO PROPRIETARY DATA AND, THEREFORE, CANNOT QUOTE A PRICE FOR ITEMS OF PROPRIETARY DATA.

"3. MR. FISHER STATED, HOWEVER, THAT RADIO ENGINEERING PRODUCTS HAS FILED SEVEN (7) PATENT APPLICATIONS IN THE U.S. PATENT OFFICE COVERING FEATURES OF THESE CONNECTORS AND STATED THAT HIS ATTORNEYS HAD ADVISED THAT PROPRIETARY DATA DOES NOT INCLUDE RIGHTS TO USE PATENTS AND IF THE U.S. GOVERNMENT WANTED TO USE THESE PATENTS OR HAVE ANOTHER CONTRACTOR USE THEM FOR THE U.S. GOVERNMENT THAT ROYALTIES WOULD HAVE TO BE PAID OR A LICENSE AGREEMENT WOULD HAVE TO BE ENTERED INTO WITH RADIO ENGINEERING PRODUCTS FOR THE USE OF THESE PATENTS. UNDERSIGNED AGREED WITH THIS ADVICE. (IT SHOULD BE POINTED OUT THAT IT IS UNLIKELY THAT ROYALTIES WOULD BE PAID UNTIL PATENTS HAD ACTUALLY ISSUED, BUT IT WOULD BE POSSIBLE FOR THE U.S. GOVERNMENT TO ENTER INTO A LICENSE TO USE THESE RIGHTS, CALLED "PROPRIETARY RIGHTS" BY RADIO ENGINEERING PRODUCTS, BEFORE A PATENT ISSUED.)

"4. WITH REFERENCE TO THE TELEGRAM SENT BY RADIO ENGINEERING PRODUCTS TO MAJ. VOGEL ON 22 DECEMBER 1958 AND CONFIRMED BY LETTER DATED 23 DECEMBER 1958 WHEREVER RADIO ENGINEERING PRODUCTS REFERS TO "PROPRIETARY RIGHTS" THEY ARE REFERRING TO "PATENTS" ISSUED OR APPLIED FOR, BUT THEY ARE NOT REFERRING TO "PROPRIETARY DATA" WHICH THEY HAVE STATED THEY DO NOT HAVE OR OWN.

"5. THE DRAWINGS TO BE FURNISHED, WHICH RADIO ENGINEERING PRODUCTS STATES WILL BE COMPLETE WILL NOT INCLUDE ANY PROPRIETARY DATA, AND NO PROPRIETARY DATA WILL BE WITHHELD.

"6. THE DRAWINGS MAY POSSIBLY INCLUDE NEW OR NOVEL IDEAS WHICH FORM THE BASIS FOR THE SEVEN (7) FILED PATENT APPLICATIONS. THE GOVERNMENT, OR ANY GOVERNMENT CONTRACTOR, THUS WILL BE PUT ON NOTICE THAT PATENT RIGHTS MAY ULTIMATELY BE INVOLVED WHICH WOULD REQUIRE THE PAYING OF ROYALTIES OR THE ENTERING INTO OF A LICENSE AGREEMENT WITH RADIO ENGINEERING PRODUCTS.'

THE CONTRARY ARGUMENT BY CCC AND REP IS THAT THE PLAIN, UNAMBIGUOUS MEANING OF THE TELEGRAM IS THAT PROPRIETARY RIGHTS IN THE PRODUCTION DRAWINGS AND IN THE DRAWINGS REQUIRED BY SPECIAL NOTE 1 WERE RETAINED BY REP AND THAT THE STANDARD ASPR UNLIMITED RIGHTS CLAUSES ARE THEREFORE INAPPLICABLE TO THOSE DRAWINGS. A READING OF THE TELEGRAM ALONE WOULD SEEM TO SUPPORT THE REP ARGUMENT, AND IF IT WAS POSSIBLE TO DECIDE THE CASE ON THE BASIS OF THE CONTRACT ALONE, THE ARGUMENT ADVANCED BY REP WOULD BE ENTITLED TO CONSIDERABLE WEIGHT. HOWEVER, IN VIEW OF THE DIRECT CONFLICT BETWEEN THE REP INTERPRETATION OF THE TELEGRAM WORDING AND THE ALL- ENCOMPASSING RIGHTS IN DATA CLAUSES, AS WELL AS THE CONFLICT BETWEEN THE REP AND AMC INTERPRETATION OF THE TELEGRAM ITSELF, WE CONCLUDE THAT IT IS NECESSARY TO GO BEYOND THE CONTRACT ITSELF IN AN ATTEMPT TO ASCERTAIN THE TRUE INTENT OF THE PARTIES. IT IS A WELL-SETTLED PRINCIPLE OF CONTRACT INTERPRETATION THAT WHERE THE CONTRACTUAL INSTRUMENT IS UNCLEAR AS TO THE INTENT OF THE PARTIES, EXTRINSIC EVIDENCE TENDING TO SHOW THE MEANING ASCRIBED TO WORDS AND PHRASES CONTAINED IN THE CONTRACT SHOULD BE CONSIDERED, AND IN CASES WHERE THE CONDUCT OF THE PARTIES BEFORE THE EMERGENCE OF A CONTROVERSY INDICATES THEIR INTERPRETATION OF CONTRACT TERMS, SUCH CONDUCT SHOULD BE GIVEN GREAT, IF NOT CONTROLLING WEIGHT IN DETERMINING INTENT. SEE CORBIN ON CONTRACTS, VOL 3, SEC. 536, 558; DELORO SMELTING AND REFINING COMPANY V. UNITED STATES, 317 F.2D 382. FOR REASONS GIVEN BELOW, IT IS OUR OPINION THAT THE CONDUCT OF CCC AND REP FROM THE TIME IMMEDIATELY PRECEDING THE CONSUMMATION OF THE CONTRACT UNTIL THE VARIOUS PROTESTS WERE FILED IN EARLY 1965 SHOWS CLEARLY THAT THEY CONCURRED IN THE AMC INTERPRETATION OF THE CONTRACT.

FIRST, IT IS NOTED THAT NO PROTESTS WERE MADE AGAINST THE MISUSE OF PROPRIETARY DATA UNTIL SOME 6 YEARS OR MORE AFTER CONTRACT -83881 WAS CONSUMMATED. DURING THOSE YEARS, THE GOVERNMENT MADE REPEATED USE OF THE DATA NOW ALLEGED TO BE PROPRIETARY TO REP, BOTH IN THE COMPETITIVE PROCUREMENTS OF CONNECTORS AND IN THE DEVELOPMENT AND PUBLICATION OF MILITARY SPECIFICATION FOR CONNECTORS. CCC AND REP ADMIT TO KNOWLEDGE OF THESE DISCLOSURES, AND, IN FACT, REP RELIES ON THEM IN ITS PROTEST TO SHOW THE EXTENT OF THE GOVERNMENT'S "MISUSE" OF ITS DATA. A COMPLETE REVIEW OF THE REP SUBMISSIONS AND THE AMC REPORT FAILS TO REVEAL ANY REQUESTS BY REP OR CCC THAT THE PROPRIETARY CHARACTER OF DATA FURNISHED UNDER CONTRACT - 83881 BE PRESERVED OR THAT A LICENSE AGREEMENT PERMITTING UNLIMITED DISCLOSURE BE NEGOTIATED. IN FACT, THE RECORD IS BARREN OF ANY REFERENCE TO "PROPRIETARY RIGHTS" FROM THE TIME OF THE SUBMISSION OF THE TELEGRAM IN JANUARY 1959 UNTIL THE SUBMISSION OF THE CURRENT PROTESTS EARLY IN 1965. IN OUR OPINION, THIS FAILURE ON THE PART OF CCC AND REP TO TAKE STEPS TO RESTRICT THE DISCLOSURE OF DATA CLEARLY SHOWS CONCURRENCE WITH THE GOVERNMENT'S INTERPRETATION OF THE CONTRACT. THIS OPINION IS REINFORCED BY THE COMPELLING NEED FOR SECRECY IN THIS AREA IN ORDER TO RETAIN THE PROPRIETARY NATURE OF INFORMATION FOR WHICH PROTECTION IS DESIRED. ONCE DATA LOSES ITS PROPRIETARY NATURE, IT IS EXTREMELY DIFFICULT TO REGAIN IT, OR TO ASSESS THE AMOUNT OF DAMAGE SUFFERED BY THE WRONGED PARTY. THIS DIFFICULTY, OF COURSE, INCREASES GREATLY WITH THE PASSAGE OF TIME. IT IS DIFFICULT TO ACCEPT THAT IT WAS THE COMPANY'S UNDERSTANDING AND INTENTION THAT USE OF ITS DATA WAS EXPLICITLY RESTRICTED WHEN IT STANDS IDLY BY WITHOUT COMPLAINT KNOWING THAT SUCH DATA IS CONSISTENTLY BEING USED TO ITS DETRIMENT.

ADDITIONALLY, IN CONTRAST TO THE CURRENT INTERPRETATION OF THE TELEGRAM ADVANCED BY CCC AND REP, THE INTERPRETATION OF THE CONTRACTING OFFICIALS IS GIVEN CREDENCE BY A LETTER DATED DECEMBER 26, 1958, FROM MR. C. B. FISHER OF REP TO THE CONTRACTING OFFICER WHEREIN MR. FISHER SPEAKS OF PATENT LICENSES WITH RESPECT TO THE CONNECTORS RATHER THAN LICENSES TO USE PROPRIETARY DATA. IN PARAGRAPHS 4 AND 5 OF THE LETTER, THE FOLLOWING STATEMENTS APPEAR:

"4. THE DESIGN OF THIS CONNECTOR WAS MADE BY RADIO ENGINEERING PRODUCTS. THIS COMPANY THEREFORE CONSIDERS IT HAS PROPRIETARY RIGHTS IN THE DESIGN, AND OWNS A NUMBER OF INVENTIONS INVOLVED IN THIS DESIGN. AN APPLICATION HAS BEEN MADE FOR A U.S. PATENT AND OTHER APPLICATIONS ARE NOW BEING PREPARED.

"THE DESIGN AND INVENTIONS WERE NOT MADE ON INSTRUCTIONS OR AT THE EXPENSE OF THE U.S. OR CANADIAN GOVERNMENTS.

"5. THIS COMPANY IS PREPARED TO TAKE ONE OR ALL OF THE FOLLOWING STEPS, AS MAY BE TO THE BEST INTERESTS OF THE U.S. GOVERNMENT, AND THIS COMPANY:

"A. OFFER NON-EXCLUSIVE PATENT LICENSES TO ANY U.S. OR CANADIAN FIRM WHICH APPLIES FOR A LICENSE, AT A REASONABLE RATE OF ROYALTY, WITH MINIMUM ANNUAL PAYMENTS, AS HAS BEEN CUSTOMARY FOR MANY YEARS IN THE ELECTRONICS INDUSTRY.

"B. ARRANGE FOR ONE OR MORE SOURCES OF SUPPLY FOR THESE CONNECTORS, WITHIN THE U.S. AND PROVIDE EACH SOURCE WITH PATENT RIGHTS AND MANUFACTURING KNOW-HOW. SUCH SOURCES WILL OF COURSE HAVE TO DEMONSTRATE FINANCIAL ABILITY, ENGINEERING CAPABILITY AND PRODUCTION FACILITIES. WOULD BE GLAD TO KNOW HOW MANY SOURCES YOU WISH TO HAVE, AND WHAT RATE OF PRODUCTION YOU FEEL EACH SHOULD BE ABLE TO ATTAIN.'

THE LETTER USES THE PHRASE "PROPRIETARY RIGHTS IN THE DESIGN" OF THE CONNECTOR SPECIFICALLY WITH REFERENCE TO EXISTING PATENTS, PATENT APPLICATIONS, AND AN OFFER TO ISSUE PATENT LICENSES. THIS PHRASE IS SUBSTANTIALLY THE SAME AS THE ONE USED IN THE CONTROVERSIAL TELEGRAM, AND YET THERE IS NO MENTION IN THE REMAINDER OF THE LETTER OF LICENSES OTHER THAN PATENT LICENSES AND NO DISCUSSION OF RIGHTS OTHER THAN PATENT RIGHTS. IN ADDITION, THE LETTER REFERS TO NEGOTIATIONS THEN BEING CONDUCTED WITH MR. MOSES CAMMER, PRESIDENT OF THE SPECIALTY ELECTRONICS DEVELOPMENT CORPORATION, FOR A PATENT LICENSE. THE NEGOTIATIONS REFERRED TO IN THE LETTER APPEAR TO BE THE SAME ONES TO WHICH THE TELEGRAM REFERS, AND THE LETTER CLEARLY REFERS TO NEGOTIATIONS FOR PATENT RIGHTS--- NOT RIGHTS TO PROPRIETARY DATA. THUS, THE MEANING ASCRIBED BY REP TO THE PHRASE ,PROPRIETARY RIGHTS IN THE DESIGN" IN THE ABOVE DECEMBER 26, 1958 LETTER APPEARS TO BE IN AGREEMENT WITH THE AMC INTERPRETATION OF THE TELEGRAM.

WE THEREFORE CONCLUDE THAT THE INTENT OF THE PARTIES AS EXPRESSED IN THE TELEGRAM REFERRED TO IN THE NOTICE OF AWARD AND BY THE UNLIMITED RIGHTS IN DATA CLAUSES CONTAINED ELSEWHERE IN THE CONTRACT WAS THAT THE GOVERNMENT ACQUIRED BY CONTRACT UNLIMITED RIGHTS IN THE DATA SUPPLIED UNDER CONTRACT -83881.