Back in April 2022, we looked at how data rights are handled by the Department of Defense in the DFARS (Defense Acquisition Regulation Systems), and prior to that, we explored many of the regulations regarding data rights and similar intellectual property. This is all well and good, but many of you probably wonder what this might look like when it is applied in the real world. For this, we turn to a recent case in front of the Court of Federal Claims (COFC) involving Raytheon concerning what exactly is “technical data.”

Since 2009, the United States Army and Raytheon have been in a series of contracts with each other in which Raytheon helped engineer the Patriot weapons system.  Each one of these contracts expressly incorporated DFARS 252.227-7013, “Rights in Technical Data,” as well as another DFARS clause, DFARS 252.227-7037, “Validation of Restrictive Markings on Technical Data.” We discussed the former in that April 2022 post. As for the latter clause, it provides for how contracting officers verify that a contractor’s use of restrictive markings to protect its rights in data is justified.

One of Raytheon’s contracts was modified to include an item requiring Raytheon to provide “vendor lists” to the Army in one of the Contract Data Requirement List (“CDRL”) items. It is worth noting that according to DoD protocol, when drafting a CDRL, a contracting agency may reduce the scope of information that is required for data acquisition but may not add to the scope. In this case, the item in question was a form, DI-MGMT-80894, which stated that the reason for the requirement of the Vendor Lists was “to identify a complete listing of all sources used … in procuring any subcontracted item,” and to provide “a means for the government to track parts selection, qualification, and identification of parts.” The vendor lists were to include the part number of components purchased, the manufacturer’s name and address, the supplier’s CAGE code, whether the part was specification controlled, and whether the part was source controlled. This information was to come from contractor invoices and orders, not existing government documentation.

Raytheon did provide vendor lists. However, the first two it provided bore restrictive markings that did not comply with the requirements for restrictive markings on technical data. Raytheon maintained the position that the information in the vendor lists was not “technical data” under DFARS 252.227-7013, and so were not subject to that clause or related regulations. Raytheon claimed that the vendor lists were “management” data. The Army rejected this characterization, stating that the data was technical data. Eventually, this dispute wound up in the COFC.

The COFC, of course, first looked specifically to the language of DFARS 252.227-7013 for the definition of “technical data.” The clause provides that “[t]echnical data means recorded information, regardless of the form or method of the recording, of a scientific or technical nature (including computer software documentation). The term does not include computer software or data incidental to contract administration, such as financial and/or management information.” This definition unfortunately did not define what information is of a technical nature. Quoting a Federal Circuit case, the COFC observed, “[w]hen terms [in a regulation] are undefined, the court may consider the [dictionary] definitions of those terms in order to determine their meaning.” The dictionary, in turn, defined “technical” to mean “of or pertaining to the mechanical arts and applied sciences generally.”

The information in the vendor lists was comprised of names of companies, addresses, and various identification numbers and codes. The COFC concluded this information was not of a technical nature. For one, the court noted, “the vendor lists are just what their name implies—lists of the vendors from which Raytheon purchased parts used in the missile system.” Additionally, “the lists do not include information about the technical aspects of the parts Raytheon purchased. They do not, for example, reveal the physical, functional, or performance requirements of the components listed.” Nor did the lists include any information on the design, manufacture, or assembly of the parts, the COFC remarked. In fact, there were parts not even on the lists at all due to lack of recent purchase history. None of the information on the lists was derived from technical sources or prepared by technical experts either. Although the government made a last-ditch effort by arguing the information was technical as it would be used by persons with technical expertise to accomplish technical tasks, the COFC rejected this as unpersuasive.

The COFC also looked at the DI-MGMT-80894 form to determine whether the information was technical in nature but found it irrelevant to the analysis. The language was part of the contract, but it did not impose an obligation on the Army to limit the use of the lists to identifying “a complete listing of all sources used … in procuring any subcontracted item” and providing “a means for the government to track parts selection, qualification, and identification of parts.”

After considering prior regulations which gave a description of technical data as “research and engineering data, engineering drawings and associated lists, specifications, standards, process sheets, manuals, technical reports, catalog item identifications” and the objectives of the DFARS rules on technical data, the COFC sided with Raytheon.

This case provides, in addition to a little clarity on what is “technical data,” keen insight on the fact-specific nature of these intellectual property matters. The contractor should notice how easily these cases can turn on the smallest things, and so pay extra attention to intellectual property issues when entering agreements with the federal government. If you are uncertain what rights might apply to your intellectual property, do not simply roll the dice in the hopes that it will work out. Talk with an attorney that specializes in either intellectual property, government contracts, or both to see what is best for you.

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The post DFARS Data Rights Provisions in Action first appeared on SmallGovCon - Government Contracts Law Blog.