BLOG: Raytheon Challenges CO Intellectual Property Decision in COFC

March 17, 2020

By Patrick T. Rothwell
Practice Areas: Government Contracts Law and Intellectual Property & Technology Rights

In a recent Court of Federal Claims (COFC) case,[1] Raytheon Corporation (Raytheon) challenged a federal agency order that a Government Purpose Right (GPR) legend be affixed to documents purportedly containing technical data. COFC held that the contracting officer’s (CO) decision that the documents contained technical data and the CO order to affix a GPR legend constituted a claim under COFC jurisdiction.This demonstrates that government contractors may challenge similar intellectual property disputes in COFC, despite an adverse final decision from a CO.

The CO’s Final Decision

The initial dispute arose over restrictive legends Raytheon placed on vendor lists for the U.S. Army. These lists detailed sources Raytheon used to procure subcontracted items in support of the Patriot missile system. The vendor lists contained a legend that indicated the information was proprietary to Raytheon.

The Army challenged Raytheon’s legend, arguing that the information was technical data, not management data,[2] as Raytheon indicated. And the CO attempted to affix a GPR legend,[3] as the government likely desired to use the data more broadly.

The Army instructed Raytheon to remove the legend within sixty days and resubmit the list. Raytheon declined to comply with the directive. The Army again objected to the legend and directed Raytheon to remove it, warning Raytheon that if it did not comply, the Army would remove the legend at Raytheon’s expense, reject future submissions, and withhold 10% of the total contract price until Raytheon submitted vendor lists with “proper markings.”

The CO issued a final decision regarding Raytheon’s justification of the proprietary legend. The final decision again warned that she would disapprove all future submissions that did not contain the GPR legend and reserved the right to withhold 10% of the total contract price until Raytheon complied.

 The COFC Case

Raytheon sought a declaration from COFC that the CO’s decision to affix GPR legends to its vendor lists was invalid. Raytheon claimed the government failed to follow the procedural steps required under 10 USC § 2321.[4] Given this belief, Raytheon requested that COFC find the CO’s decision contrary to law and void. The government moved to dismiss this claim for lack of subject-matter jurisdiction, arguing that COFC lacked jurisdiction because it can only exercise jurisdiction over claims based on a statute where the plaintiff seeks monetary relief, not where a plaintiff seeks merely declaratory relief (i.e., asking a court to render its opinion as to whose interpretation of the law is correct).

COFC held that it had jurisdiction to hear the dispute under the CDA. Indeed, claims covered by the CDA include “other nonmonetary disputes on which a decision of the CO has been issued under section 6 of th[e CDA],”[5] and a “claim” under the FAR is defined broadly.[6] COFC held that the CO’s decision that the vendor lists contained technical data and her direction to Raytheon to affix GPR marks resolved a “claim” for purposes of conferring jurisdiction under the CDA.

COFC also rejected the contention that the claim must be dismissed for failure to state a claim because 10 U.S.C. §2321 does not supply Raytheon with a private cause of action to enforce its requirements. However, COFC found that no private right of action to enforce that statute was asserted by Raytheon. Rather, it asserted that a violation of that statute was the basis for its claim under the CDA that the government lacked the authority to direct it to affix GPR markings to its vendor lists.

While this case did not rule on the merits of Raytheon’s challenge to the CO’s final decision directing that a GPR legend be affixed on the vendor lists, the case demonstrates that a contractor may in fact challenge the direction to affix GPR legends, or similar intellectual property disputes, in COFC after an adverse final decision.

If you have questions concerning this topic, please contact a member of PilieroMazza’s Government Contracts and Intellectual Property & Technology Rights practice groups.

Patrick Rothwell, the author of this blog, is a member of the Firm’s Government Contracts Group.

 

[1] Raytheon Company v. United States, No. 19-883 (Fed. Cl. filed Jan. 14, 2020).

[2] Technical data is defined as “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.” DFARS 252.257-7013(a)(15) (emphasis added).

[3] The GPR legend allows for limited rights protections, but only for a limited period of time, after which the government receives unlimited rights in the data and can use it for any purpose. This includes giving it to competitors.

[4] 10 U.S.C. § 2321 provides that certain procedures must be followed before the government can override or disregard proprietary data restrictions affixed by the contractor “for any contract for supplies entered into by the Department of Defense that includes provisions for the delivery of technical data.” Once a contractor attempts to restrict the government’s rights in technical data that contractor must be prepared to furnish to the CO a written justification for any such “use or release” restriction on the technical data so asserted. However, if the government disagrees with the asserted restrictions, the government may challenge these restrictions but must first provide written notice which “state[s] the specific grounds for challenging the asserted restriction.” At that point, the contractor then has sixty days to justify the “validity of the asserted restriction.” Only after all of these steps have been completed shall the CO, within 60 days of receipt of the justification, issue a decision or give notice to the contractor of the time within which a decision will be issued.

[5] 28 U.S.C. § 1491(a)(2).

[6] A “claim” is defined under FAR 2.101 as a “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.” And, as COFC has already determined, a claim “relat[es] to the contract” if it has “some relationship to the terms or performance of a government contract,” it need not be a dispute over payment or the contractor’s performance. Further, a claim covered by the CDA “need not be based on the contract itself (or a regulation that can be read into the contract) as long as it relates to its performance under the contract.”

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