B-169077, OCT 13, 1970, 50 COMP GEN 271

B-169077, OCT 13, 1970, 50 COMP GEN 271

CONTRACTS - DATA, RIGHTS, ETC. - DISCLOSURE - RESTRICTIVE MARKINGS - TIMELY REQUEST THE CANCELLATION OF AN INVITATION TO FURNISH REPAIR PARTS FOR A NAVAL VESSEL PROPELLER SYSTEM, AN INVITATION ACCOMPANIED BY DRAWINGS SUBMITTED INDIVIDUALLY OVER A LONG PERIOD OF TIME IN CONNECTION WITH THE PROCUREMENT OF THE SYSTEM, AND THE PROPOSED SOLE SOURCE PURCHASE OF THE PARTS FROM THE SUPPLIER OF THE SYSTEM ON THE BASIS THE RESTRICTIVE LEGEND REQUESTED ON THE DRAWINGS WAS MADE WITHIN 6 MONTHS OF FINAL DELIVERY OF THE DATA PACKAGE, GOES BEYOND THE AUTHORITY OF THE CONTRACTING OFFICER UNDER PARAGRAPH 9-202.3(D)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH IN PROVIDING THAT DATA RECEIVED WITHOUT A RESTRICTIVE LEGEND IF NOT ALLEGED TO BE PROPRIETARY WITHIN 6 MONTHS OF DELIVERY IS CONSIDERED TO HAVE BEEN FURNISHED WITH UNLIMITED RIGHTS, REQUIRES THE TIME LIMITATION TO BE APPLIED TO EACH DATA SUBMISSION, AND THE REQUEST HAVING BEEN UNTIMELY RECEIVED, CANCELLATION OF THE INVITATION WAS NOT JUSTIFIED. CONTRACTS - DATA, RIGHTS, ETC. - STATUS OF INFORMATION FURNISHED WHERE A RESTRICTIVE LEGEND WAS NOT ATTACHED TO DRAWINGS AT THE TIME OF INITIAL TRANSFER TO THE GOVERNMENT AND A LEGEND HAD NOT BEEN AUTHORIZED WITHIN 6 MONTHS OF SUBMISSION OF THE DATA AS PROVIDED BY PARAGRAPH 9- 202.3(D)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION, THE GOVERNMENT IN PARTIALLY PUBLISHING THE DRAWINGS VIOLATED NO CONTRACTUAL RESTRICTION, NOR IS THE GOVERNMENT LIABLE ON THE BASIS THE CONTRACTOR FURNISHING THE DRAWINGS HAD AN OBLIGATION AS LICENSEE TO PROTECT THE TRADE SECRETS OF THE LICENSOR. HOWEVER, A RESTRICTIVE LEGEND COULD BE AUTHORIZED FOR THE UNPUBLISHED DRAWINGS BY OBTAINING A DEVIATION PURSUANT TO ASPR 9-202.3(A) TO THE 6 MONTHS' TIME LIMITATION IN ASPR 9-202.3(D)(1) FOR ATTACHING A RESTRICTIVE LEGEND.

TO THE SECRETARY OF THE NAVY, OCTOBER 13, 1970:

THIS IS IN REFERENCE TO THE PROTEST BY COUNSEL FOR BALDWIN-LIMA HAMILTON CORPORATION (BLH) AGAINST THE CANCELLATION OF INVITATION FOR BIDS N00104- 70-B-1283, ISSUED BY THE SHIPS PARTS CONTROL CENTER (SPCC), MECHANICSBURG, PENNSYLVANIA, AND THE PROPOSED SOLE SOURCE PROCUREMENT OF THE ITEMS INVOLVED FROM THE BIRD-JOHNSON COMPANY. THIS MATTER WAS THE SUBJECT OF TWO REPORTS FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, REFERENCE 0232, DATED APRIL 1 AND JUNE 1, 1970.

THE BASIC QUESTION PRESENTED FOR OUR CONSIDERATION IS WHETHER BIRD JOHNSON ASSERTED PROPRIETARY RIGHTS IN ITS MANUFACTURING DRAWINGS IN A TIMELY MANNER, SO AS TO AUTHORIZE THE CONTRACTING OFFICER TO PLACE A RESTRICTIVE LEGEND ON THE DATA AND THEREBY PRECLUDE THEIR USE IN A COMPETITIVE PROCUREMENT.

THE RECORD SHOWS THAT UNDER CONTRACT N151-24352AX), DATED JUNE 16, 1966, WITH THE PHILADELPHIA NAVAL SHIPYARD, BIRD-JOHNSON WAS SUPPLYING A CONTROLLABLE PITCH PROPELLER SYSTEM OF ITS OWN COMMERCIAL DESIGN (HEREINAFTER REFERRED TO AS THE KAMEWA SYSTEM) FOR INSTALLATION IN THREE VESSELS. THE CANCELED INVITATION, WHICH IS THE SUBJECT OF THIS PROTEST, REPRESENTED THE INITIAL PROCUREMENT FOR INVENTORY (REPAIR PARTS) OF PROPELLER BLADES AND VARIOUS SHAFTS IN SUPPORT OF THE KAMEWA SYSTEM. THIS INVITATION WAS ACCOMPANIED BY DRAWINGS RECEIVED BY THE GOVERNMENT DURING 1967 FROM BIRD-JOHNSON WITHOUT RESTRICTIVE MARKINGS, AND SUBSEQUENTLY PASSED ON TO SPCC WITHOUT RESTRICTIVE MARKINGS DURING APRIL 1968. THE RECORD INDICATES THAT ON OR ABOUT SEPTEMBER 25, 1969, BIRD-JOHNSON ADVISED THE PHILADELPHIA NAVAL SHIPYARD THAT THE COMPANY INADVERTENTLY NEGLECTED TO AFFIX A PROPRIETARY LEGEND TO THE DATA WHICH IT HAD SUBMITTED, AND WAS STILL IN THE PROCESS OF SUBMITTING. BY LETTER OF NOVEMBER 25, 1969, THE CONTRACTING OFFICER ADVISED OF HIS DETERMINATION THAT BIRD-JOHNSON WAS NOT REQUIRED TO GIVE THE GOVERNMENT MORE THAN LIMITED RIGHTS TO THE TECHNICAL DATA, APPARENTLY BECAUSE THE DATA PERTAINED TO ITEMS DEVELOPED AT PRIVATE EXPENSE. ON THE BASIS THAT BIRD-JOHNSON REQUESTED PLACEMENT OF A RESTRICTIVE LEGEND ON THE DATA WITHIN 6 MONTHS OF FINAL DELIVERY OF THE DATA PACKAGE, THE CONTRACTING OFFICER ALLOWED A PROPRIETARY LEGEND TO BE AFFIXED ON THE DATA. THE RECORD SHOWS THAT SPCC ISSUED THE INVITATION AND DRAWINGS ON DECEMBER 8, 1969, AND THAT IT WAS ADVISED SUBSEQUENT THERETO THAT THE DRAWINGS WERE CONSIDERED PROPRIETARY TO BIRD-JOHNSON. ACCORDINGLY, THE REFERENCED INVITATION WAS CANCELED ON FEBRUARY 13, 1970, AND SPCC NOW PROPOSES TO AWARD A CONTRACT TO BIRD-JOHNSON ON A SOLE SOURCE BASIS.

THE 1966 CONTRACT WITH BIRD-JOHNSON CONTAINED THE STANDARD CLAUSE ENTITLED "RIGHTS IN TECHNICAL DATA (FEBRUARY 1965)" WHICH STATES, IN PERTINENT PART, THAT THE GOVERNMENT SHALL HAVE LIMITED RIGHTS IN TECHNICAL DATA PERTAINING TO ITEMS DEVELOPED AT PRIVATE EXPENSE PROVIDED THAT EACH PIECE OF DATA TO WHICH LIMITED RIGHTS ARE TO BE ASSERTED IS MARKED WITH THE PRESCRIBED LEGEND. THE CLAUSE FURTHER STATES THAT NO LEGEND SHALL BE MARKED ON, NOR SHALL ANY LIMITATION ON RIGHT OF USE BE ASSERTED TO, ANY DATA WHICH THE CONTRACTOR HAS PREVIOUSLY DELIVERED TO THE GOVERNMENT WITHOUT RESTRICTION.

WITH RESPECT TO UNMARKED TECHNICAL DATA, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 9-202.3(D)(1) PROVIDES AS FOLLOWS:

(D) UNMARKED OR IMPROPERLY MARKED TECHNICAL DATA

(1) TECHNICAL DATA RECEIVED WITHOUT A RESTRICTIVE LEGEND SHALL BE DEEMED TO HAVE BEEN FURNISHED WITH UNLIMITED RIGHTS. HOWEVER, THE CONTRACTING OFFICER MAY PERMIT THE CONTRACTOR TO PLACE A RESTRICTIVE LEGEND ON SUCH DATA WITHIN SIX MONTHS OF ITS DELIVERY IF THE CONTRACTOR DEMONSTRATES THAT THE OMISSION OF THE LEGEND WAS INADVERTENT AND THE USE OF THE LEGEND IS AUTHORIZED.

UNDER THE REFERENCED CONTRACT, BIRD-JOHNSON WAS REQUIRED TO FURNISH ONE SET OF REPRODUCIBLE DRAWINGS WITH A LIST OF CONTENT FOR EACH CATEGORY OF DATA WITHIN 52 WEEKS AFTER AWARD, WITH NINE ADDITIONAL WEEKS ALLOTTED FOR GOVERNMENT APPROVAL. MICROFILM OF THE DRAWINGS WAS ALSO REQUIRED. THE CONTRACT FURTHER PROVIDED THAT FOUR PRINTS OF ALL PLANS SHOULD BE SUBMITTED FOR APPROVAL 12 WEEKS AFTER AWARD OF CONTRACT; THAT THE SHIPYARD WOULD REQUIRE 9 WEEKS FOR APPROVAL; AND THAT COMPLETE DELIVERY OF UPDATED REPRODUCIBLES AND MICROFILM SHOULD BE MADE 31 WEEKS AFTER APPROVAL.

THE RECORD INDICATES THAT AFTER COMMENCEMENT OF WORK UNDER THE CONTRACT, ALL THE DRAWINGS COULD NOT BE COMPLETED AND SUBMITTED FOR APPROVAL WITHIN THE 12-WEEK PERIOD SET FORTH IN THE CONTRACT. THE ADMINISTRATIVE REPORT STATES ALSO THAT SHIPYARD TECHNICAL PERSONNEL, BECAUSE OF A HEAVY WORKLOAD, WOULD HAVE HAD DIFFICULTY IN REVIEWING THE DRAWINGS WITHIN 9 WEEKS. ACCORDINGLY, BIRD-JOHNSON AND THE SHIPYARD AGREED INFORMALLY, WITHOUT MODIFYING THE CONTRACT, THAT BIRD-JOHNSON SHOULD SUBMIT EACH DRAWING AND EACH DRAWING REVISION AS COMPLETED. REVISIONS COULD BE MADE BY THE SHIPYARD AS SOON AS POSSIBLE WITHOUT BEING LIMITED TO 9 WEEKS FOR REVIEW. IT IS STATED THAT AS A RESULT OF THE AGREEMENT, THE SUBMISSION OF DRAWINGS, APPROVALS, AND RESUBMISSION OF REVISED DRAWINGS STRETCHED OUT IN TIME FROM SEPTEMBER 1966 TO SEPTEMBER 1969. NONE OF THESE DRAWINGS BEARS PROPRIETARY LEGEND. THE FINAL SET OF REPRODUCIBLE DRAWINGS, WITH A LIST OF CONTENT FOR EACH CATEGORY, WAS FORWARDED TO THE SHIPYARD ON JANUARY 22, 1970. EACH DRAWING IN THIS SET BEARS A PROPRIETARY LEGEND AND A SHIPYARD APPROVAL STAMP. THE MICROFILM WAS EXPECTED TO BE DELIVERED TO THE SHIPYARD BEFORE THE END OF MAY 1970.

COUNSEL FOR BLH HAS TAKEN THE POSITION THAT THE REQUEST OF BIRD JOHNSON TO PLACE A RESTRICTIVE LEGEND ON THE DRAWINGS SUBMITTED IN ADVANCE OF THE FINAL SET WAS MADE MORE THAN 6 MONTHS AFTER SUBMISSION OF THOSE DRAWINGS WITHOUT ANY RESTRICTION, AND THEREFORE WAS NOT TIMELY; THAT THE DATA RECEIVED WITHOUT A RESTRICTIVE LEGEND MUST BE DEEMED TO HAVE BEEN FURNISHED WITH UNLIMITED RIGHTS (ASPR 9 202.3(D)(1)); AND THAT THERE IS NO JUSTIFICATION FOR CANCELLATION OF THE SUBJECT INVITATION, OR FOR THE PROPOSED SOLE SOURCE PROCUREMENT.

IT IS THE POSITION OF COUNSEL FOR THE SHIPYARD THAT THE STANDARD PROVISION IN THE BIRD-JOHNSON CONTRACT, WHICH PROHIBITS THE USE OF A PROPRIETARY LEGEND OR THE ASSERTION OF PROPRIETARY RIGHTS BY THE CONTRACTOR IN ANY DATA PREVIOUSLY DELIVERED WITHOUT RESTRICTION, IS INAPPLICABLE. HE NOTES THAT EACH DRAWING SUBMITTED BY BIRD-JOHNSON WITH ITS TECHNICAL PROPOSAL AT THE TIME THE AGENCY SOLICITED PROPOSALS, CONTAINED A PROPRIETARY LEGEND. HE STATES THAT AS OF NOVEMBER 25, 1969, DELIVERY OF THE TECHNICAL DATA HAD NOT BEEN COMPLETED; THAT IS, THE FINAL COMPLETE SET OF REPRODUCIBLE AND THE MICROFILM HAD NOT YET BEEN DELIVERED, AND, CONSEQUENTLY, HAD NOT BEEN "PREVIOUSLY DELIVERED TO THE GOVERNMENT WITHOUT RESTRICTION" AS CONTEMPLATED BY THE STANDARD DATA CLAUSE PROVISIONS. IN HIS OPINION, TO CONSTRUE THE ABOVE PROHIBITION AS APPLYING TO ANY UNIT OF DATA DELIVERED RATHER THAN TO THE FIRST COMPLETE DATA PACKAGE, WOULD RESULT IN SUBJECTING CERTAIN DRAWINGS TO UNLIMITED RIGHTS AND OTHERS TO LIMITED RIGHTS, WHICH ASPR AND THE PARTIES COULD NEVER HAVE INTENDED. IT IS OBSERVED BY COUNSEL THAT IT WOULD BE PUNITIVE, INEQUITABLE, AND WOULD WORK A FORFEITURE IF BIRD-JOHNSON'S PROPRIETARY RIGHTS IN DATA WERE LOST BECAUSE OF AN INADVERTENT OMISSION. COUNSEL'S BELIEF STEMS FROM THE FACT THAT THE KAMEWA SYSTEM WAS DEVELOPED AT PRIVATE EXPENSE AND THE CONTRACT'S DATA CLAUSE PROVIDES FOR THE ACQUISITION OF ONLY LIMITED RIGHTS IN SUCH DATA. LASTLY, HE STATES THAT PURSUANT TO ASPR 9-202.3(D)(1) THE CONTRACTING OFFICER PROPERLY ALLOWED BIRD-JOHNSON TO RESTRICT THE USE OF ITS DATA, SINCE IT IS ONLY PRACTICAL AND REASONABLE TO INTERPRET THE 6 MONTHS' PROVISION FOR PLACING A RESTRICTIVE LEGEND ON PREVIOUSLY UNMARKED DATA AS INAPPLICABLE WHILE THE CONTRACTOR IS STILL DELIVERING DATA UNDER THE CONTRACT.

IN LETTERS RECEIVED HERE FROM BIRD-JOHNSON AND ITS COUNSEL, THE COMPANY IN EFFECT AFFIRMS THE NAVY'S POSITION. IT ALSO ARGUES THAT THE GOVERNMENT SHOULD HAVE BEEN AWARE OF THE COMPANY'S RIGHTS AND OBLIGATIONS TO PROTECT THE TRADE SECRETS IN THE KAMEWA DATA BY VIRTUE OF BIRD-JOHNSON'S STATUS AS A LICENSEE OF SUCH DATA FROM A. JOHNSON & COMPANY, INC., AND, IN ANY EVENT, THE GOVERNMENT IS NOW ON NOTICE OF THIS FACT AND CANNOT NOW CLAIM UNLIMITED RIGHTS. A. JOHNSON HAS ALSO AFFIRMED BIRD-JOHNSON'S POSITION IN THIS REGARD. BIRD-JOHNSON FURTHER ARGUES THAT IT MADE A TIMELY REQUEST TO PLACE A RESTRICTIVE LEGEND ON ITS DATA AND THAT THE CONTRACT DATA CLAUSE PROVISION WHICH PRECLUDES ASSERTING RIGHTS IN DATA PREVIOUSLY DELIVERED WITHOUT RESTRICTION SHOULD NOT BE INVOKED HERE, SINCE IT BELIEVES THAT PURSUANT TO SECTION 2-401 OF THE UNIFORM COMMERCIAL CODE DELIVERY OF TITLE TO DATA WAS NOT EFFECTED UNTIL THE COMPANY COMPLETED PERFORMANCE WITH REFERENCE TO THE ENTIRE DATA PACKAGE. MOREOVER, BIRD-JOHNSON BELIEVES THAT DELIVERY CAN OCCUR ONLY IF BOTH PARTIES JOIN IN IT AND THEIR MINDS CONCUR, AND THAT IN THIS CASE DELIVERY WAS NOT MADE SINCE THE DRAWINGS WERE NOT, AND COULD NOT BE, CONSIDERED FINAL UNTIL AFTER THE SEA TRIALS BECAUSE OF THE POSSIBILITY OF CHANGES IN THE DATA UP UNTIL THAT TIME. THE COMPANY ALSO ARGUES THAT THE CONTRACTING OFFICER'S DETERMINATION OF NOVEMBER 25, 1969 (THAT THE GOVERNMENT IS ENTITLED ONLY TO LIMITED RIGHTS IN DATA), CANNOT BE REVERSED, CITING GENERAL ELECTRIC CO. V UNITED STATES, 188 CT. CL. 620, 412 F. 2D 1215 (1969), AND PREDECESSOR CASES INCLUDING BELL AIRCRAFT CORP. V UNITED STATES, 120 CT. CL. 398, 100 F. SUPP. 661 (1951), AFFIRMED PER CURIAM, 344 U.S. 860 (1952).

AFTER CONSIDERING THE ARGUMENTS PRESENTED, WE BELIEVE IT IS APPARENT THAT, PURSUANT TO ASPR 9-202.3(D), THE DATA SUBMITTED WITHOUT A PROPRIETARY LEGEND, AND USED IN THIS PROCUREMENT, MUST BE DEEMED TO HAVE BEEN FURNISHED TO THE GOVERNMENT WITH UNLIMITED RIGHTS. THE RESULTING QUESTION THEREFORE IS WHETHER THE CONTRACTING OFFICER WAS AUTHORIZED TO PERMIT A SUBSEQUENT RESTRICTION IN THE CIRCUMSTANCES OUTLINED ABOVE. FEEL THAT, AS A MATTER OF LAW, THE CONTRACTING OFFICER ACTED BEYOND HIS AUTHORITY IN PLACING A RESTRICTIVE LEGEND ON THE DATA ORIGINALLY SUBMITTED WITHOUT RESTRICTION, SINCE MORE THAN 6 MONTHS TRANSPIRED AFTER THE CONTRACTOR RELINQUISHED AND TRANSFERRED POSSESSION OF THE DATA TO THE GOVERNMENT. WHILE FINAL DELIVERY OF THE ENTIRE DATA PACKAGE, AND THE SEA TRIALS, MAY HAVE OCCURRED WITHIN 6 MONTHS OF THE CONTRACTING OFFICER'S ACTIONS, WE SEE NO BASIS FOR CONSTRUING THE 6 MONTHS' LIMITATION IN THE CITED REGULATION AS A LIMITATION WHICH BEGINS TO RUN ONLY UPON FINAL DELIVERY OF THE COMPLETE DATA PACKAGE. IT IS OUR OPINION THAT THE CONSTRUCTION SUGGESTED BY NAVY COUNSEL AND BIRD-JOHNSON IS INCONSISTENT BOTH WITH THE STANDARD DATA CLAUSE PROVISION REQUIRING EACH PIECE OF DATA TO WHICH LIMITED RIGHTS ARE TO BE ASSERTED TO BE SO MARKED, AND WITH THE REGULATION REQUIRING DATA RECEIVED WITHOUT A RESTRICTIVE LEGEND TO BE DEEMED TO HAVE BEEN FURNISHED WITH UNLIMITED RIGHTS.

IN ARGUING THAT THE RELATIONSHIP BETWEEN THE PARTIES IN THE PRESENT CASE IS SUCH THAT DISCLOSURE TO THE GOVERNMENT WAS PROTECTED, BIRD JOHNSON RELIES ON MILGRIM, TRADE SECRETS, SECTION 5.03(1)(B), WHICH STATES THAT AN EXPRESS CONTRACTUAL RESTRICTION IS AN EFFECTIVE MEANS OF PROTECTION AGAINST COMPETITIVE USE OF TRADE SECRETS. WHILE COUNSEL CONTENDS THAT UNDER THE TERMS OF BIRD-JOHNSON'S CONTRACT WITH THE GOVERNMENT, DISCLOSURE OF THE DRAWINGS IS PROHIBITED, IT IS ALSO CLEAR THAT UNDER THE TERMS OF THE CONTRACT BIRD-JOHNSON MAY REQUIRE THE GOVERNMENT TO RESTRICT ITS USE OF DATA ONLY IF THE PRESCRIBED LEGEND HAS BEEN ATTACHED. SINCE A RESTRICTIVE LEGEND WAS NOT ATTACHED TO THE DRAWINGS AT THE TIME OF THEIR INITIAL TRANSFER TO THE GOVERNMENT AND SINCE A LEGEND HAD NOT BEEN PROPERLY AUTHORIZED AND ATTACHED AT THE TIME THE DRAWINGS WERE PUBLISHED AS PART OF THE CANCELED INVITATION, WE PERCEIVE NO BASIS FOR CONCLUDING THAT THE GOVERNMENT'S PUBLICATION VIOLATED ANY CONTRACTUAL RESTRICTION.

BIRD-JOHNSON ALSO CITES SECTION 5.03(4) OF THE ABOVE TREATISE, WHICH STATES THAT THERE ARE CIRCUMSTANCES IN WHICH COURTS RECOGNIZE PRIVILEGED COMMUNICATIONS BETWEEN SUPPLIERS AND PURCHASERS, AND CONTENDS THAT IT MUST BE ASSUMED THE PRESENT RELATIONSHIP IS ONE OF CONFIDENTIALITY. IN SUPPORT OF THIS PROPOSITION, THERE IS CITED THE DECISION IN PRESSED STEEL CAR CO. V STANDARD STEEL CAR CO., 60 A.4 (1904). IN THAT CASE, THERE WAS NO EXPRESS LIMITATION ON THE PART OF THE SUPPLIER AS TO THE USE TO BE MADE OF THE PRINTS IN QUESTION, NOR WAS THERE AN EXPRESSED RESTRICTION PLACED UPON THE OWNERSHIP. NEVERTHELESS, IT WAS HELD THAT UNDER THE CIRCUMSTANCES THE PURPOSE FOR WHICH THE PRINTS WERE DELIVERED WAS CLEARLY UNDERSTOOD BY ALL PARTIES AND THE PURCHASER'S RELEASE OF THE PRINTS TO A COMPETITOR OF THE SUPPLIER RESULTED IN A CLEAR VIOLATION OF THE TRUST AND CONFIDENCE IN WHICH THE PRINTS WERE RECEIVED. WE BELIEVE, HOWEVER, THAT THE CASE PRESENTLY BEFORE US IS PROPERLY DISTINGUISHABLE, SINCE THE CONTRACT CLAUSE EXPRESSLY IMPOSES AN OBLIGATION UPON THE GOVERNMENT TO RESTRICT ITS USE OF THE DRAWINGS ONLY IF THE PRESCRIBED LEGEND HAS BEEN ATTACHED. BIRD- JOHNSON ALSO CONTENDS THAT THE GOVERNMENT CANNOT CLAIM UNLIMITED RIGHTS IN THE DATA SINCE IT SHOULD HAVE BEEN AWARE, AND IS NOW ON NOTICE, OF BIRD- JOHNSON'S RIGHTS AND OBLIGATIONS TO ITS LICENSOR TO PROTECT THE TRADE SECRETS IN THE KAMEWA DATA. THE COMPANY HAS SUBMITTED COPIES OF VARIOUS LICENSE AGREEMENTS THROUGH WHICH IT OBTAINED THE DATA; AND WE NOTE THAT WHILE BIRD-JOHNSON AGREED TO MAINTAIN THE TRADE SECRETS SO LONG AS THE INFORMATION WAS NOT GENERALLY ACCESSIBLE OR KNOWN TO THE PUBLIC, IT WAS NONETHELESS AUTHORIZED TO DISCLOSE AND GRANT SUBLICENSES TO THE DATA SUBJECT TO SIMILAR CONDITIONS. IN THIS REGARD, WE SEE NO BASIS FOR REQUIRING THE CONTRACTING OFFICER IN THE INSTANT PROCUREMENT TO HAVE PRESUMED AT THE TIME THE DATA WAS RECEIVED WITHOUT PROPRIETARY MARKINGS THAT SUCH DATA CONTAINED TRADE SECRETS WHICH WERE STILL UNPUBLISHED, OR THAT THE GOVERNMENT HAD NOT RECEIVED THEM UNDER AN UNLIMITED USE LICENSE. RATHER, SINCE BIRD-JOHNSON FAILED TO MARK ITS DATA WITH A PROPRIETARY LEGEND, WE FEEL THE CONTRACTING OFFICER COULD REASONABLY HAVE ASSUMED UNDER THE CIRCUMSTANCES THAT BIRD-JOHNSON HAD ACQUIRED THE RIGHT TO PROVIDE UNLIMITED RIGHTS IN DATA, EITHER THROUGH AN AMENDMENT TO ITS LICENSE TO THE DATA OR BY VIRTUE OF THE GENERAL ACCESSIBILITY TO SUCH INFORMATION BY THE PUBLIC. MOREOVER, IT IS NOTED THAT COPIES OF THE LICENSE AGREEMENTS WERE PROVIDED THE GOVERNMENT PRIOR TO AWARD FOR THE EXPRESS PURPOSE OF ESTABLISHING COMPLIANCE WITH CERTAIN SECURITY REGULATIONS OF THE UNITED STATES AND DID NOT ESTABLISH ANY UNDERSTANDING BETWEEN THE PARTIES TO MODIFY THE DATA RIGHTS PROVIDED FOR IN THE STANDARD CONTRACT DATA CLAUSE.

BIRD-JOHNSON STATES THAT, IN ANY EVENT, THE NAVY'S PRESENT KNOWLEDGE OF THE COMPANY'S CONTENTIONS RELATIVE TO THE DATA PRECLUDES THE NAVY FROM NOW CLAIMING UNLIMITED RIGHTS TO USE THE DATA. IN THIS RESPECT, COUNSEL RELIES ON MILGRIM, SUPRA, WHICH FOLLOWS THE GENERAL RULE OF SECTION 758 OF THE RESTATEMENT, TORTS. THIS SECTION GENERALLY PROVIDES THAT ONCE AN INNOCENT USER OF A TRADE SECRET HAS NOTICE OF THE SECRECY AND THAT THE DISCLOSURE TO HIM WAS A BREACH OF DUTY TO ANOTHER, OR MISTAKE, THE INNOCENT PARTY IS LIABLE FOR FURTHER USE OR DISCLOSURE UNLESS HE HAS IN GOOD FAITH PAID VALUE FOR THE SECRET OR HAS SO CHANGED HIS POSITION THAT TO SUBJECT HIM TO LIABILITY WOULD BE INEQUITABLE.

WHILE THIS WOULD APPEAR TO BE A CORRECT STATEMENT OF THE LAW OF TORTS, IT HAS BEEN HELD THAT THE FEDERAL TORT CLAIMS ACT EXEMPTS CLAIMS ARISING OUT OF INTERFERENCE WITH CONTRACT RIGHTS. IN ANY EVENT, THE TORT WOULD LIE IN THE WRONGFUL ACQUISITION OF THE TRADE SECRETS, AND ONE WHO HAS LAWFULLY ACQUIRED A TRADE SECRET MAY USE IT IN ANY MANNER WITHOUT LIABILITY UNLESS HE ACQUIRED IT SUBJECT TO A CONTRACTUAL LIMITATION OR RESTRICTION AS TO ITS USE. IF THE LICENSEE'S USE EXCEEDS THAT PERMITTED BY THE LICENSE, THE LICENSOR'S REMEDY MIGHT LIE ONLY IN CONTRACT, AND NOT IN TORT. SEE. AKTIEBOLAGET BOFORS V UNITED STATES, 194 F. 2D 145 (1951). IT IS CLEAR IN THE PRESENT CASE THAT UNDER ITS LICENSE AGREEMENTS BIRD-JOHNSON COULD LEGALLY GRANT SUBLICENSES TO THE DATA TO BIRD-JOHNSON CUSTOMERS AND DID IN FACT CONTRACT TO DISCLOSE SUCH DATA TO THE GOVERNMENT. THEREFORE, THE GOVERNMENT, BEING ENTITLED TO THE DATA, HAS LAWFULLY ACQUIRED IT, AND SINCE A RESTRICTION WAS NOT TIMELY PLACED UPON THE USE OF SUCH DATA, IT CANNOT BE SAID THAT THERE IS ANY CONTRACTUAL LIMITATION OR RESTRICTION ON ITS USE.

IT HAS BEEN RECOGNIZED THAT THE NATURE OF A TRADE SECRET IS SUCH THAT, SO LONG AS IT REMAINS A SECRET, IT IS VALUED PROPERTY TO ITS POSSESSOR, WHO CAN EXPLOIT IT COMMERCIALLY TO HIS OWN ADVANTAGE. BUT ONCE A TRADE SECRET IS PUBLISHED, THE REST OF THE WORLD MAY HAVE THE RIGHT TO COPY IT. UNDERWATER STORAGE V UNITED STATES RUBBER CO., 371 F. 2D 950 (1966), CERTIORARI DENIED, 386 U.S. 911. AS EXPLAINED ABOVE, THE DRAWINGS IN OUR OPINION WERE LAWFULLY DISCLOSED TO THE GOVERNMENT UNDER ITS CONTRACT WITH BIRD-JOHNSON, AND SUCH DRAWINGS WERE THEREAFTER LAWFULLY AND IN GOOD FAITH PUBLISHED BY THE GOVERNMENT TO ITS POTENTIAL SUPPLIERS. ALTHOUGH WE HAVE HELD THAT A SINGLE WRONGFUL DISCLOSURE DOES NOT END AN OWNER'S PROPRIETARY RIGHTS (42 COMP. GEN. 346, 354 (1963)), IN THE INSTANT CASE THERE WAS NO WRONGFUL DISCLOSURE, AND WE BELIEVE THAT IN THE CIRCUMSTANCES THE DRAWINGS IN QUESTION ARE NOW IN THE PUBLIC DOMAIN. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE DRAWINGS WERE NOT TORTIOUSLY ACQUIRED BY THE GOVERNMENT OR BY ITS PRIVIES, AND THERE IS NO BASIS FOR IMPOSING UPON THE GOVERNMENT ANY CONTRACTUAL OBLIGATION TO RESTORE A PROTECTED STATUS TO THE FOUR DRAWINGS WHICH HAVE ALREADY BEEN PUBLISHED.

BIRD-JOHNSON HAS CITED OUR DECISION IN 42 COMP. GEN. 346 (1963) AS A BASIS FOR REQUIRING LIMITED USE OF DATA IN THIS CASE. WE DO NOT FEEL THAT DECISION IS PERTINENT, SINCE THE TRADE SECRETS THERE WERE CONTAINED IN DATA MARKED WITH A RESTRICTIVE LEGEND, AND THE INVENTOR HAD PREVIOUSLY DISCLOSED HIS INVENTION TO THE GOVERNMENT PURSUANT TO THE TERMS OF A GOVERNMENT FORM REQUIRING PROTECTION AGAINST UNAUTHORIZED DISCLOSURE.

IN VIEW OF THE CONTRACTUAL AND REGULATORY PROVISIONS WHICH SPECIFICALLY DEAL WITH THE PROBLEM IN THE INSTANT CASE, WE DO NOT AGREE WITH BIRD- JOHNSON'S CONTENTION THAT SECTION 2.401 OF THE UNIFORM COMMERCIAL CODE (DEALING WITH PASSING OF TITLE), OR ITS ARGUMENT THAT DELIVERY WAS NOT EFFECTED, ARE RELEVANT AND CONTROLLING.

WE HAVE NOTED THE POINT RAISED AND THE AUTHORITY CITED BY BIRD JOHNSON FOR THE PROPOSITION THAT THE CONTRACTING OFFICER'S DECISION TO PERMIT THE CONTRACTOR TO PLACE RESTRICTIVE LEGENDS ON UNMARKED DRAWINGS CANNOT BE REVERSED. HOWEVER, IN THE CASES CITED BY BIRD-JOHNSON, THE CONTRACTING OFFICERS WERE FOUND TO POSSESS THE ACTUAL AUTHORITY REQUIRED TO MAKE THEIR DECISIONS, WHEREAS IN THE PRESENT CASE THE CONTRACTING OFFICER'S AUTHORITY WAS EXPRESSLY LIMITED BY THE PROCUREMENT REGULATION AS DISCUSSED ABOVE, AND A LEGAL MATTER HE FAILED TO ACT WITHIN HIS AUTHORITY.

BIRD-JOHNSON HAS ALSO CITED OUR DECISION B-170468, DATED SEPTEMBER 8, 1970, FOR THE PROPOSITION THAT A SIGNIFICANT DEGREE OF FINALITY MUST BE ATTACHED TO THE ADMINISTRATIVE POSITION IN MATTERS INVOLVING PROPRIETARY INFORMATION. IN VIEW OF THAT DECISION, IT IS ARGUED THAT WE SHOULD NOT OBJECT TO ANY ACTION BY THE NAVY TAKEN IN ACCORDANCE WITH ITS DECISION THAT THE DRAWINGS ARE PROPRIETARY TO BIRD-JOHNSON. A CAREFUL READING OF THAT DECISION, HOWEVER, PERMITS NO BASIS FOR DOUBT THAT THE ADMINISTRATIVE POSITION TO WHICH WE ACCORDED FINALITY WAS THAT ON THE PURELY FACTUAL QUESTION OF WHETHER AIR FORCE HAD, OR HAD NOT, USED DATA WHICH WAS PROPRIETARY TO THE PROTESTING BIDDER IN PREPARING ITS SPECIFICATIONS. THE PRESENT CASE, HOWEVER, THERE IS NO FACTUAL DISPUTE. RATHER, THE QUESTION IS ONE OF LAW, WHICH THIS OFFICE IS REQUIRED TO RESOLVE ON THE BASIS OF APPLICABLE LAW AND REGULATIONS.

WHILE WE MUST THEREFORE CONCLUDE THAT THE GOVERNMENT'S USE OF THE FOUR DRAWINGS IN QUESTION IN A COMPETITIVE PROCUREMENT WAS PROPER, AND THAT CANCELLATION OF THAT PROCUREMENT IN FAVOR OF A SOLE SOURCE PROCUREMENT WITH BIRD-JOHNSON WOULD NOW BE IMPROPER, IT IS OUR UNDERSTANDING THAT, IN ADDITION TO THOSE DRAWINGS PUBLISHED WITH THE CANCELLED INVITATION, THE NAVY WAS FURNISHED SOME 200-ODD DRAWINGS ON WHICH BIRD-JOHNSON HAD NOT PLACED A RESTRICTIVE LEGEND, AND WHICH HAVE NOT AS YET BEEN PUBLISHED BY THE GOVERNMENT. WITH RESPECT TO THE FUTURE USE OF THOSE UNPUBLISHED DRAWINGS, WHICH WE ARE ADVISED PERTAIN TO THE MOST CRITICAL AND SIGNIFICANT ASPECTS OF THE KAMEWA SYSTEM, WE NOTE THAT THE ATTACHMENT OF A RESTRICTIVE LEGEND COULD PROPERLY BE AUTHORIZED BY OBTAINING A DEVIATION, PURSUANT TO ASPR 9-202.3(A), TO THE 6-MONTHS' TIME LIMIT IN ASPR 9- 202.3(D)(1) FOR ATTACHING A RESTRICTIVE LEGEND ON SUCH UNMARKED AND UNPUBLISHED DATA. WE THEREFORE SUGGEST THAT CONSIDERATION BE GIVEN TO THE DESIRABILITY OF SUCH ACTION.