When working on federal government contracts, especially those involving the delivery of technical data, contractors must be aware of how to properly mark the data they deliver to protect their rights. If the data is not marked correctly, the government could end up with broader rights than intended, which may impact the contractor's ability to protect its proprietary information. Here's a summary of key points for contractors handling technical data under defense contracts.
Nonconforming Markings vs. Unmarked Data
When delivering technical data to the government, contractors need to use specific legends to indicate the level of rights the government will have in the data. The Defense Federal Acquisition Regulation Supplement (DFARS) indicates the correct legends to use. If a contractor uses a different legend, such as marking something "proprietary" without the proper DFARS legend, this is considered a "nonconforming marking." This is different from data that is completely unmarked.
What Happens with Nonconforming Markings?
If a contractor delivers data with a nonconforming marking, the government is supposed to notify the contractor and give them a chance to correct the marking. If the contractor corrects the marking, the government will use the data according to the appropriate restrictions. If the contractor fails to correct it within the given time (typically 60 days), the government can correct the marking itself. However, the contractor does not lose its rights in the data—it's just that the government can use the data according to the corrected legend.
Unmarked Data: The Risk of Losing Rights
If data is delivered without any marking, the government automatically gets unlimited rights. This means the government can use, share, or modify the data without restriction. However, contractors can ask for permission to add a proper legend if the omission was a mistake. There is a six-month window for requesting this correction, but once the data has been released, the contractor loses the ability to restrict its use.
What if You Use Multiple Markings?
Sometimes, contractors might use both an authorized DFARS legend and another term like "proprietary." If this second marking isn't authorized by the DFARS, it can be challenged. The government may initiate a challenge to the use of unjustified markings, and the contractor would need to justify the restrictive legend through a dispute resolution process.
Protecting Data Rights: What Contractors Should Do
To protect your rights in technical data, you must follow two critical steps:
- Identify Data with Limited Rights: At the beginning of the contract, list all technical data that should be delivered with less than unlimited rights. Anything not listed is assumed to be delivered with unlimited rights, so it's essential to include all proprietary information.
- Use the Correct Legend: Each piece of technical data must be marked with the appropriate DFARS legend. Failing to use the proper legend could result in the government getting more rights than it should have. Always make sure that the data is clearly marked on every page where restrictions apply.
Resolving Disputes
If the government believes a contractor has used an unjustified restrictive marking (for example, marking something with limited rights when the government believes it should have government purpose rights), the issue can be addressed through a formal challenge under the Contract Disputes Act. Contractors will have the opportunity to defend their use of restrictive markings, and the government must wait for the dispute to be resolved before acting on the data.
Conclusion: Vigilance is Key
To avoid giving the government unlimited rights to your technical data, it's essential to closely follow the DFARS. Ensure all data is properly marked with the correct legends, and be ready to correct any issues if the government challenges your markings. By staying compliant with the regulations, you can protect your proprietary data while fulfilling your obligations under government contracts.
* This article is provided for information purposes only. It does not constitute legal advice. It is not intended to form an attorney-client relationship. Any legal advice should be sought from an attorney. *
