Protection of Data Rights
September 1, 1999
A recent U.S. Court of Federal Claims' (COFC) decision demonstrates the
importance of a government contractor documenting its rights in technical data.
The case, FN Manufacturing v. United States, was first reported in the Fourth
Quarter 1998 Holland & Knight Government Contracts Newsletter. In a 1998
decision, the COFC found that the government could agree, as part of a
negotiated settlement of a data rights dispute, to award a sole source contract
for related manufacturing work, if the settlement agreement did not
impermissibly bargain away government rights in technical data. After hearing
evidence on the reasons for the government's decision, the court, in August
1999, found that the government's assessment of the legal rights of the
government and its contractor to the technical data was reasonable.
Colt's Manufacturing Company claimed rights to certain technical data based
on technology pre-existing a licensing agreement with the government. The
evidence presented to the court supported Colt's position. But, equally as
important, the court agreed that Colt's took steps to protect its rights to the
pre-existing data through correspondence, negotiation of contract language, and
making contract deliverables with appropriate restrictive legends.
This case illustrates the right way for a contractor to protect its
intellectual property. Unfortunately, all too often, contractors, especially
those new to government contracting, fail to take the necessary steps to
safeguard their property interests. Such oversights can not only cause them to
forfeit competitive advantage, it can also result in the loss of valuable
intellectual property rights.