B-138638, SEP. 2, 1959

B-138638, SEP. 2, 1959

TO UNIVERSAL LUMBER COMPANY, D/B/A:

REFERENCE IS MADE TO YOUR REQUEST FOR RECONSIDERATION OF OUR DECISION OF APRIL 6, 1959, B-138638, WHEREIN IT WAS HELD THAT WE COULD FIND NO BASIS TO DISAGREE WITH THE CONCLUSION REACHED BY THE DEPARTMENT OF THE AIR FORCE THAT IT HAD ACQUIRED UNLIMITED RIGHTS IN THE DRAWINGS AND DATA SECURED UNDER CONTRACTS NOS. AF 42/600/-18817 AND 19582, AND THAT THE AIR FORCE HAD THE RIGHT TO USE SUCH DRAWINGS AND DATA TO EFFECT PROCUREMENT OF TOW TARGETS BY FORMAL ADVERTISING UNDER INVITATION FOR BIDS NO. 4-600-59-92.

AS STATED IN YOUR LETTER, THE DECISION OF APRIL 6 WAS LARGELY DEVOTED TO THE QUESTION OF WHETHER CLAUSE 42, RIGHTS IN DATA UNLIMITED, WAS OR WAS NOT A PART OF CONTRACT NO. AF 42/600/-18817 DURING THE TIME WHEN IT WAS BEING NEGOTIATED AND AT THE TIME OF ITS EXECUTION BY THE PARTIES THERETO. THE REASON THEREFOR WAS THAT IT APPEARED TO BE YOUR CONTENTION THAT SAID CLAUSE WAS NOT A PART OF THE PROPOSED CONTRACT DURING THE NEGOTIATIONS NOR WAS IT A PART OF THE DEFINITIVE CONTRACT AT THE TIME OF ITS EXECUTION. DID NOT APPEAR THAT YOU 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.

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, 1959.

THE CONTENTIONS MADE IN YOUR LETTER OF AUGUST 5, 1959, CONCERNING THE PERFORMANCE OF THE CONTRACTOR WHO RECEIVED THE AWARD UNDER INVITATION FOR BIDS NO. 42-600-59-92, ARE BEING REFERRED TO OUR FIELD REPRESENTATIVES FOR INVESTIGATION, AND ANY IMPROPER DEVIATIONS FROM THE TERMS OF THE CONTRACT WILL BE BROUGHT TO THE ATTENTION OF THE PROPER AUTHORITIES.