Boeing Federal Circuit Appeal on Technical Data Rights Dispute

The Federal Circuit recently addressed a significant dispute in Boeing Co. v. Secretary of the Air Force involving technical data rights in government contracts. Boeing challenged decisions from the Armed Services Board of Contract Appeals (Board) regarding markings placed on technical data delivered to the Air Force. This case sheds light on the interpretation of federal regulations governing contractors' data rights.

The Case Background

Boeing entered two contracts with the Air Force, providing technical data under the F-15 Eagle Passive/Active Warning Survivability System program. These contracts incorporated the Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.227-7013, which governs data rights for noncommercial technical data. Specifically, the clause outlines conditions under which contractors may mark technical data to assert restrictions on government rights.

The dispute began when Boeing submitted data with a proprietary legend that restricted third-party access. This legend, however, did not conform to DFARS requirements. The Air Force rejected Boeing’s data, asserting that the markings were noncompliant and directed Boeing to revise them at its own expense. Boeing appealed the decision, arguing that its markings did not restrict government rights and therefore were not governed by DFARS marking requirements.

The Board’s Decision and Appeal

The Board denied Boeing’s motion for summary judgment, siding with the Air Force’s interpretation that DFARS authorized only specific legends for technical data markings. According to the Board, Boeing’s markings were nonconforming because they were not explicitly listed in DFARS Subsection 7013(f).

Boeing argued that its markings aimed solely to restrict third-party access and did not limit the government’s rights. Therefore, Boeing claimed that DFARS Subsection 7013(f), which applies to restrictions on government rights, should not govern its proprietary legend.

Federal Circuit’s Analysis

The Federal Circuit reviewed the Board's decision de novo, focusing on the interpretation of DFARS Subsection 7013(f). The court analyzed the plain language of the clause, which states that contractors may mark technical data to restrict government rights but only with authorized legends. Boeing contended that its markings fell outside the scope of this clause since they addressed third-party restrictions.

The court agreed with Boeing, finding that Subsection 7013(f) governs only legends that limit government rights. It emphasized that DFARS does not explicitly address legends concerning third parties. Consequently, the court concluded that Boeing’s proprietary legend was not subject to DFARS marking requirements.

Ruling and Implications

The Federal Circuit reversed the Board’s decision, vacated its final judgment, and remanded the case for further proceedings to resolve factual disputes about whether Boeing’s markings might inadvertently restrict government rights.

This ruling clarified the scope of DFARS Subsection 7013(f), underscoring its application to government rights rather than third-party restrictions. The decision also reinforced contractors’ ability to assert proprietary interests in technical data while delivering products under government contracts.

Conclusion

The Federal Circuit’s decision in Boeing Co. v. Secretary of the Air Force highlights the complexities of technical data rights under government contracts. By delineating the scope of DFARS marking requirements, the court provided crucial guidance for contractors navigating similar issues. Our team at Whitcomb, Selinsky PC, is here to assist businesses in understanding and protecting their rights in federal contracting.

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