Flightsafety International Inc. v. Secretary of the Air Force

United States Court of Appeals
for the Federal Circuit
______________________
FLIGHTSAFETY INTERNATIONAL INC.,
Appellant
v.
SECRETARY OF THE AIR FORCE,
Appellee
______________________
2023-1700
______________________
Appeal from the Armed Services Board of Contract Ap-
peals in No. 62659.
______________________
Decided: February 28, 2025
______________________
HOWARD WOLF -R ODDA, Abrahams Wolf-Rodda, LLC,
Potomac, MD, argued for appellant. Also represented by
D ANIEL BERNARD ABRAHAMS .
ANTHONY F. SCHIAVETTI, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for appellee. Also repre-
sented by BRIAN M. BOYNTON, MARTIN F. HOCKEY , J R.,
P ATRICIA M. MCC ARTHY ; J OEL BERNARD L OFGREN, D AVID
STARK, Commercial Litigation Field Center, United States
Air Force, Joint Base Andrews, MD.
______________________
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 2
Before MOORE, Chief Judge, D YK and CUNNINGHAM,
Circuit Judges.
D YK, Circuit Judge.
When the government acquires products or services
from contractors, the government obtains rights to the
technical data provided pursuant to the contract. The
scope of the government’s rights depends both on how de-
velopment of that data was funded and the nature of the
data. This case presents questions about the government’s
and a contractor’s rights with respect to commercial tech-
nical data developed exclusively at private expense under
federal acquisition statutes and the Defense Acquisition
Regulation Supplement (“DFARS”), 48 C.F.R. § 200, et
seq., and the rights of the contractor to place restrictive
markings on its technical data.
The U.S. Air Force contracted with CymSTAR, LLC
(“CymSTAR”), which in turn awarded two subcontracts to
appellant FlightSafety International Inc. (“FlightSafety”),
to provide flight simulation products and training services.
In performing the subcontracts, FlightSafety supplied the
government with commercial technical data that included
various restrictive markings. The Air Force challenged the
restrictive markings. The Armed Services Board of Con-
tract Appeals (“Board”) determined that, under the appli-
cable statutes and regulations, the restrictive markings
were improper. See FlightSafety Int’l Inc., ASBCA
No. 62659, 23-1 BCA ¶ 38,245.
FlightSafety appeals. We affirm.
BACKGROUND
In August 2015, the Air Force entered a contract with
CymSTAR to support the Training Systems Acquisition III
program, “including the development, acquisition, and sus-
tainment efforts needed to meet Air Force simulation and
training requirements.” 23-1 BCA ¶ 38,245 at 185,704. In
October 2018, CymSTAR awarded subcontracts to
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 3
FlightSafety “for the supply and installation of a visual sys-
tem replacement for the C-5 Aircrew Training System . . .
including image generators, display management systems,
and projectors for the C-5 weapon systems trainers at sev-
eral Air Force installations in the United States.” Id.
FlightSafety’s subcontracts with CymSTAR required
FlightSafety to supply specific technical data to the govern-
ment.
FlightSafety’s subcontracts also incorporated several
DFARS clauses that were included in CymSTAR’s agree-
ment with the Air Force, two of which are pertinent here:
DFARS 252.227-7015 (“Commercial Data Clause”), and
DFARS 252.227-7037 (“Validation Clause”).
The Commercial Data Clause set forth the govern-
ment’s and a contractor’s respective rights to commercial
technical data developed exclusively at the contractor’s pri-
vate expense. See DFARS 252.227-7015.
The Validation Clause provided the procedures a con-
tracting officer must use to challenge the validity of restric-
tive markings placed on technical data by a contractor. See
DFARS 252.227-7037.1
In June 2018, FlightSafety delivered twenty-one draw-
ings that included technical data to the Air Force. It is un-
disputed that the drawings pertained to commercial items
or processes and were developed exclusively at private ex-
pense. FlightSafety initially marked its drawings with one
1 A separate clause, DFARS 252.227-7013 (“Non-
commercial Data Clause”), set forth the government’s
rights to noncommercial technical data that the govern-
ment has funded in whole or in part. The Noncommercial
Data Clause additionally prescribed the content of restric-
tive legends that contractors may place on such govern-
ment-funded data.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 4
of two restrictive legends. The first legend (“Long Mark-
ing”) read as follows:
J.A. 6. The second legend (“Short Marking”) read as fol-
lows:
FlightSafety International Proprietary
Rights Reserved
J.A. 6.
In July 2018, the Air Force notified FlightSafety that it
disapproved of the restrictive legends. In October 2019,
FlightSafety declined to remove the legends, arguing that
the Air Force had no right to compel their removal.
FlightSafety nonetheless proposed an alternate marking
(“Alternate Marking”):
FlightSafety Technical Data provided to the US.
Government with unrestricted rights only pursu-
ant to the requirements in CymSTAR Purchase Or-
der PO003174-3 under US Government Contract
#FA8621-15-D-6257, DO: FA8621-17-F-6255, the
procedures specified in DFARS 252.227-7015 and
limited by DFARS 227.7103-1.
J.A. 6.
In February 2020, the Air Force rejected FlightSafety’s
proposed Alternate Marking and announced that it would
formally challenge FlightSafety’s legends under the proce-
dures set forth in the Validation Clause. According to the
Air Force, FlightSafety’s drawings constituted so-called
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 5
“OMIT” data because they were “necessary for operation,
maintenance, installation, or training (other than detailed
manufacturing or process data).” DFARS 252.227-
7015(b)(1)(iv). The Air Force contended that FlightSafety’s
legends impermissibly “restrict[ed] the Government’s right
to use, modify, reproduce, release, or disclose the data.”
J.A. 342 ¶ 2. Specifically, the Air Force stated that the re-
strictions, were they to remain on the drawings, “would
make it impracticable to procure the item to which the
technical data pertain competitively at a later time.” Id.
Thereafter, in accordance with the governing proce-
dures under the Contract Disputes Act of 1978, 41 U.S.C.
§ 7101, et seq., FlightSafety submitted a formal request to
the contracting officer to issue a final decision concerning
the propriety of its restrictive markings. On June 18, 2020,
the contracting officer issued a final decision finding
FlightSafety’s restrictive markings impermissible.
FlightSafety appealed to the Board, filing a three-count
complaint. The first count alleged that, for commercial
technical data developed exclusively at private expense,
the government could only challenge the funding source of
the data and not the markings themselves. FlightSafety’s
second count asserted that none of its three restrictive
markings contradicted or limited the government’s rights,
and that even if its drawings were considered OMIT data,
the government was precluded from using that data for fu-
ture procurement purposes. The third count alleged that
FlightSafety’s drawings were not OMIT data.
FlightSafety later withdrew its third count pursuant to
a settlement agreement between the parties. That agree-
ment provided that the government was entitled to an “un-
restricted right to use, modify, reproduce, release, perform,
display, or disclose” eighteen of the disputed drawings “and
to permit others to do so, to the same extent as the Govern-
ment would if [the disputed drawings] were OMIT Data
under DFARS § 252.227-7015(b)(1).” J.A. 582 ¶ 2. The
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 6
agreement also clarified that the parties previously had
agreed that the remaining three drawings constituted
OMIT data.
On cross-motions for summary judgment, the Board
ruled for the government. See 23-1 BCA ¶ 38,245. The
Board first rejected FlightSafety’s argument that the gov-
ernment could not challenge the markings under the Vali-
dation Clause. Id. at 185,709–13. According to the Board,
the plain meaning of the Validation Clause and its author-
izing statute demonstrated that “the government may chal-
lenge restrictions even when it does not challenge whether
the technical data was developed exclusively at private ex-
pense.” Id. at 185,710. The Board further found that the
legislative history of the Validation Clause’s authorizing
statute was “[a]mbiguous and [u]nhelpful” and, in any
event, could not overcome the plain language of the “unam-
biguous statute.” Id. at 185,712.
The Board next held that the parties’ dispute about
whether the Air Force obtained an unrestricted license to
FlightSafety’s data was resolved in part by the parties’ set-
tlement agreement. Id. at 185,713–14. The Board con-
cluded that because FlightSafety agreed to permit the Air
Force to use its drawings as if they were OMIT data, it
granted the Air Force an unrestricted-rights license that
allowed the Air Force to use the drawings for future pro-
curements. Id. at 185,714–15.
In summary, the Board concluded that all three of the
restrictive markings impermissibly restricted the govern-
ment’s rights under the contract. See id. at 185,723–26.
FlightSafety appeals. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(10) and 41 U.S.C. § 7107(a)(1)(A).
D ISCUSSION
We review the Board’s grant of summary judgment de
novo. Gates v. Raytheon Co., 584 F.3d 1062, 1067 (Fed. Cir.
2009). The interpretation of statutes, regulations, and
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 7
government contracts presents a question of law, which we
also review de novo. See Forman v. United States, 329 F.3d
837, 841 (Fed. Cir. 2003).
I
We must first consider the scope and extent of the gov-
ernment’s rights in FlightSafety’s technical data supplied
pursuant to the contracts.
The government’s rights to technical data are defined
in part by statute. See 10 U.S.C. § 2320.2 The governing
statute required the Secretary of Defense to “prescribe reg-
ulations to define the legitimate interest of the United
States and of a contractor or subcontractor in technical
data pertaining to an item or process.” Id. § 2320(a)(1).
The regulations adopted pursuant to the statute helped to
define the government’s rights in technical data. Both the
statute and regulations were perhaps unduly complex, but
we think they were nonetheless clear.
While this case involves commercial data, it is helpful
to understand how the statute and regulations treated non-
commercial data. In general, where noncommercial tech-
nical data had been exclusively funded at federal expense
(not the situation here), the governing statute conferred
2 During the pendency of FlightSafety’s appeal be-
fore the Board, Congress recodified and renumbered the
relevant provisions of Title 10 from 10 U.S.C. §§ 2320–
2321, to 10 U.S.C. §§ 3771–75, 3781–86. See William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021, Pub. L. No. 116-283, § 1833, 134 Stat.
3388, 4225–34 (2021). The changes to these sections, in-
cluding minor language changes, were non-substantive.
The regulations promulgated under the former codifica-
tions were not affected by the changes. See id. §§ 1884–85,
134 Stat. at 4294. This opinion cites to the provisions as
they were numbered at the time the parties’ dispute arose.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 8
upon the government the “unlimited right to—(i) use tech-
nical data pertaining to the item or process; or (ii) release
or disclose the technical data to persons outside the gov-
ernment or permit the use of the technical data by such
persons.” Id. § 2320(a)(2)(A). The Noncommercial Data
Clause clarified that the “unlimited right” provided in 10
U.S.C. § 2320(a)(2)(A) included the “rights to use, modify,
reproduce, perform, display, release, or disclose technical
data in whole or in part, in any manner, and for any pur-
pose whatsoever, and to have or authorize others to do so.”
DFARS 252.227-7013(a)(16).3 It is undisputed that where
the government obtains unlimited rights in noncommercial
technical data, it may use that data for future procure-
ments under the Noncommercial Data Clause.4
3 As with the governing statutes, the DFARS provi-
sions applicable to this case have been non-substantively
amended during the pendency of this dispute. See DFARS:
Definition of “Commercial Item” (DFARS Case 2018-D066),
88 Fed. Reg. 6578 (Jan. 31, 2023). This opinion uses the
language in the regulations as it appeared at the time the
parties’ dispute arose.
4 In addition to describing the government’s unlim-
ited rights to federally funded noncommercial data, the
Noncommercial Data Clause provided “government pur-
pose” rights where the data at issue were partially funded
by the government, DFARS 252.227-7013(b)(2), and fur-
ther specified that the government obtains only “limited
rights” to noncommercial data that were developed exclu-
sively at private expense. DFARS 252.227-7013(b)(3) (em-
phasis added). Those limited rights are inapplicable here,
as all agree that FlightSafety’s drawings are commercial
technical data. Appellant’s Br. 25 (“The drawings here re-
main private commercial data regardless of the license
rights the Government receives”); Appellee’s Br. 51
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 9
On the other hand, where, as here, the data are com-
mercial data that were funded exclusively at private ex-
pense, “the contractor or subcontractor may restrict the
right of the United States to release or disclose technical
data pertaining to the item or process to persons outside
the government or permit the use of the technical data by
such persons.” Id. § 2320(a)(2)(B) (emphasis added).5
However, this right-to-restrict did not extend to certain cat-
egories of technical data, including data that “is necessary
for operation, maintenance, installation, or training (other
than detailed manufacturing or process data . . .),” i.e.,
OMIT data. Id. § 2320(a)(2)(C)(iii). Thus, where the gov-
ernment obtains rights to privately funded, commercial
OMIT data, it enjoys an “unrestricted” right to that data.
The Board found that the data in dispute were OMIT data.6
In accordance with the statute, the Commercial Data
Clause established a two-tier licensing scheme, whereby
the government received an “unrestricted” license to cer-
tain categories of data including OMIT data, and a more
limited license to all other categories of privately funded
commercial data:
(describing FlightSafety’s drawings as “commercial tech-
nical data”).
5 The statute did not make a distinction between
“commercial” and “noncommercial” data that have been de-
veloped exclusively at private expense. However, the stat-
ute’s implementing regulations did make such a
distinction.
6 The statute distinguished between OMIT data and
“detailed manufacturing or process data.” 10 U.S.C.
§ 2320(a)(2)(C)(iii). There is no contention here that
FlightSafety’s drawings constitute detailed manufacturing
or process data.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 10
(b) License.
(1) The Government shall have the unre-
stricted right to use, modify, reproduce, re-
lease, perform, display, or disclose
technical data, and to permit others to do
so, that—
. . .
(iv) Are necessary for operation,
maintenance, installation, or train-
ing (other than detailed manufac-
turing or process data) [OMIT
data]
. . .
(2) Except as provided in paragraph (b)(1)
of this clause, the Government may use,
modify, reproduce, release, perform, dis-
play or disclose technical data within the
Government only. The Government shall
not—
(i) Use the technical data to manu-
facture additional quantities of the
commercial items[.]
DFARS 252.227-7015 (emphases added).
FlightSafety asserts that, regardless of the govern-
ment’s “unrestricted” right to use OMIT data under para-
graph (b)(1) of the Commercial Data Clause, the
government may not use commercial OMIT data that have
been developed exclusively at private expense for future
procurements. Appellant’s Br. 51–53. FlightSafety relies
primarily on its interpretation of the Commercial Data
Clause. According to FlightSafety, the clause only allows
the government to use OMIT data for OMIT purposes—
that is, for “operation, maintenance, installation, and
training.” Id. at 53–55.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 11
FlightSafety points out that the Commercial Data
Clause did not explicitly grant the government an “unlim-
ited right,” unlike the Noncommercial Data Clause. Alt-
hough the Commercial Data Clause granted the
government an unrestricted right to “use, modify, repro-
duce, release, perform, display, or disclose” OMIT data,
DFARS 252.227-7015(b)(1)(iv), it did not expressly grant
the government the “unlimited” right to use OMIT data “in
any manner, and for any purpose whatsoever,” as in the
Noncommercial Data Clause, DFARS 252.227-7013(a)(16).
We agree with most commentators that there is no mean-
ingful difference between the “unlimited rights” in the
Noncommercial Data Clause and the “unrestricted rights”
in the Commercial Data Clause.7
In any event, quite apart from its reliance on this minor
language difference between clauses, FlightSafety’s other
arguments misread the Commercial Data Clause. Para-
graph (b)(1) of the Commercial Data Clause granted the
government unrestricted rights to OMIT data.
FlightSafety’s theory is that those rights were restricted by
paragraph (b)(2), which stated that, “[e]xcept as provided
in paragraph (b)(1),” the government shall not “[u]se the
7 See Leonard Rawicz, Commercial Items Technical
Data Policy Revisited: Understanding the DFARS Policy,
28 N ASH & CIBINIC REP . ¶ 27 (May 2014) (“The unrestricted
rights license is similar to the ‘unlimited rights’ license.”);
Fed. Cir. Bar Ass’n Comm. Members, Study of Best Prac-
tices and Opportunities for Improvements in Federal Pro-
curement Contracting, 24 F ED. CIR. B.J. 319, 326 (2015)
(“Unrestricted rights in the technical data delivered to
DOD with commercial items pursuant to the DFARS 7015
clause are essentially the same as the unlimited rights li-
cense that DOD obtains in noncommercial technical data
that pertains to an item, component, or process developed
at government expense.”).
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 12
technical data to manufacture additional quantities of the
commercial items.” DFARS 252.227-7015(b)(2)(i).
FlightSafety’s interpretation is incorrect. Since para-
graph (b)(1) gave the government unrestricted rights in
OMIT data, the obvious implication of the “except” clause
in paragraph (b)(2) was that the prohibitions appearing in
paragraph (b)(2) did not apply to the categories of data de-
scribed in paragraph (b)(1), and that the government could
use paragraph (b)(1) data, including OMIT data, for further
procurement purposes. See Russello v. United States, 464
U.S. 16, 23 (1983) (“[W]here Congress includes particular
language in one section of a statute but omits it in another
section of the same Act, it is generally presumed that Con-
gress acts intentionally and purposely in the disparate in-
clusion or exclusion.” (alteration in original) (citation
omitted)). Under the Commercial Data Clause, what mat-
tered was the category of data at issue and, being para-
graph (b)(1) data, OMIT data were not subject to the
procurement prohibition.
Our understanding that the manufacturing restriction
did not apply to commercial, privately funded OMIT data
is further confirmed by other language in the statute and
the regulations. Section 2320(a)(2)(B) of the statute au-
thorized contractors to “restrict” the government’s rights to
“technical data pertaining” to “an item or process that is
developed . . . exclusively at private expense,” but Sec-
tion 2320(a)(2)(C) made clear that this authorization did
not extend to certain categories of data—including OMIT
data—which the statute defined by the character of the
data, not the purpose for which that data may be used. 10
U.S.C. § 2320(a)(2)(B)–(C).
A separate regulation that also delineated the govern-
ment’s “rights in technical data” explained that, under the
Commercial Data Clause, the data provided to the govern-
ment ordinarily “may not be used to manufacture addi-
tional quantities of the commercial items.”
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 13
DFARS 227.7102-2(a). But “[t]hose restrictions do not ap-
ply to the technical data described in [DFARS] 227.7102-
1(a).” Id. The “technical data described” in the cross-ref-
erenced regulation included OMIT data. See DFARS
227.7102-1(a)(2) (“DoD shall acquire only the technical
data customarily provided to the public with a commercial
item or process, except technical data that . . . [a]re re-
quired for repair or maintenance of commercial items or
processes, or for the proper installation, operating, or han-
dling of a commercial item . . . .” (emphasis added)).
The question remains as to whether the twenty-one
drawings in dispute constitute OMIT data. The parties
agree that three of FlightSafety’s drawings are OMIT data.
As to the other eighteen drawings, the government ac-
quired the right to use FlightSafety’s technical data for fur-
ther procurement purposes because the parties’ settlement
agreement provided that the eighteen drawings would be
treated as OMIT data. Specifically, the agreement stipu-
lated that the government may use FlightSafety’s draw-
ings “to the same extent as the Government would if the
[drawings] were OMIT data.” J.A. 582 ¶ 2 (emphasis
added). We see no merit to FlightSafety’s argument that
there is a meaningful difference between an agreement
that the drawings in fact constitute OMIT data and an
agreement to treat the drawings as if they were OMIT
data.
II
We next consider whether the government could chal-
lenge FlightSafety’s restrictive markings placed on the
twenty-one drawings. FlightSafety argues that 10 U.S.C.
§ 2321 only allowed the government to challenge the fund-
ing source of privately developed commercial data, and
that since there is no challenge to the funding source of
FlightSafety’s data, the government was not permitted to
contest FlightSafety’s restrictive markings. FlightSafety’s
position ignores the plain language of the statute.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 14
Section 2321 set forth a procedure to be followed by the
government and contractors when they dispute the propri-
ety of restrictive markings. See 10 U.S.C. § 2321. Section
2321(d)(1) broadly provided that:
The Secretary of Defense may challenge a use or
release restriction asserted with respect to tech-
nical data by a contractor or subcontractor at any
tier under a contract subject to this section if the
Secretary finds that—
(A) reasonable grounds exist to question
the current validity of the asserted re-
striction[.]
Id. § 2321(d)(1) (emphases added).
Notably, Section 2321(d)(1) did not limit the govern-
ment’s authority to bring challenges to restrictive mark-
ings based on the data’s commercial or noncommercial
character or its funding source. But FlightSafety argues
that Section 2321(f) cabined the government’s rights. Sub-
section (f) provided:
Presumption of development exclusively at private
expense. In the case of a challenge to a use or re-
lease restriction that is asserted with respect to
technical data of a contractor or subcontractor un-
der a contract for commercial products, the con-
tracting officer shall presume that the contractor or
subcontractor has justified the restriction on the
basis that [the] commercial product[] was devel-
oped exclusively at private expense, whether or not
the contractor or subcontractor submits a justifica-
tion in response to the notice provided pursuant to
subsection (d)(3). In such a case, the challenge to
the use or release restriction may be sustained only
if information provided by the Department of De-
fense demonstrates that [the] commercial product[]
was not developed exclusively at private expense.
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 15
10 U.S.C. § 2321(f) (emphasis added).
In FlightSafety’s view, the “only if” language limited
the government’s ability to challenge markings placed on
privately funded technical data only to the situation where
the government showed that the “commercial product[]
was not developed exclusively at private expense.” Id. To
illustrate the point, at argument counsel for FlightSafety
represented that, under its view, the government could not
challenge a restrictive legend stating that the government
“has no rights to this drawing” if the drawing was devel-
oped exclusively at private expense. Oral Arg. at 8:58–
9:15.
FlightSafety’s interpretation would effectively defeat
the government’s rights in technical data by, for example,
allowing the contractor to insert a marking that states the
government has “no rights” to the data. This is because the
government “shall . . . be bound” by any restrictive mark-
ing that it has not successfully invalidated pursuant to the
challenge procedures provided by the statute. 10 U.S.C.
§ 2321(i)(2)(A).
Because FlightSafety’s position would conflict with the
statute, it cannot be correct. See Caraco Pharm. Lab’ys,
Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 416 (2012) (adopt-
ing construction of statutory term in part “because Con-
gress meant (as it usually does) for the provision it enacted
to fit within the statutory scheme”).8 The language of
8 Chapman v. Hous. Welfare Rts. Org., 441 U.S. 600,
608 (1979) (“As in all cases of statutory construction, our
task is to interpret the words of these statutes in light of
the purposes Congress sought to serve.”); Dep’t of Home-
land Sec. v. MacLean, 574 U.S. 383, 393 (2015) (rejecting
interpretation that “could defeat the purpose of the whis-
tleblower statute”); see also Pitsker v. Off. of Pers. Mgmt.,
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 16
Section 2321(f) was not to the contrary. The heading made
clear that the subsection concerned a “[p]resumption of de-
velopment exclusively at private expense.” 10 U.S.C.
§ 2321(f). The reference to “the challenge” in subsection (f)
was obviously to the challenge based on the funding source
of the data, not to challenges to restrictive markings gen-
erally. The language is properly read as stating: “[i]n such
a case, the challenge to the use or release restriction [based
on it not being developed solely at private expense] may be
sustained only if information provided by the Department
of Defense demonstrates that [the] commercial product[]
was not developed exclusively at private expense.” Id. This
reading most naturally “fit[s] within the statutory scheme”
enacted by Congress, Caraco Pharm. Lab’ys, 566 U.S. at
416, and demonstrates that the statute simply set forth a
presumption to be observed, and possibly rebutted upon a
sufficient showing of evidence, by the government when
challenging markings based on the funding source of the
data. See 10 U.S.C. § 2321(f). The provision did not, as
FlightSafety suggests, constrain the government to bring-
ing only one form of challenge against restrictive markings
placed on privately funded data.
We are not persuaded by FlightSafety’s arguments to
the contrary based on legislative history. FlightSafety con-
tends that subsection (f) was adopted by Congress to “en-
courage[] commercial contracting, in part, by exempting
commercial contractors from requirements to provide tech-
nical data or rights in such data . . . ‘unless the government
could prove that an item was developed at government
234 F.3d 1378, 1381 (Fed. Cir. 2000) (“[W]e must ‘find that
interpretation which can most fairly be said to be imbedded
in the statute, in the sense of being most harmonious with
its scheme and with the general purposes that Congress
manifested.’” (quoting NLRB v. Lion Oil Co., 352 U.S. 282,
297 (1957)).
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 17
expense.’” Appellant’s Br. 17 (quoting H.R. REP . N O. 103-
712, pt. 2 (1994) (Conf. Rep.), 1994 U.S.C.C.A.N. 2607,
2664); see also id. at 26–28.
The legislative history cannot contradict what is appar-
ent on the face of the statute. See Res-Care, Inc. v. United
States, 735 F.3d 1384, 1389 (Fed. Cir. 2013); Xianli Zhang
v. United States, 640 F.3d 1358, 1364 (Fed. Cir. 2011) (“If
the statute is clear and unambiguous, then the plain mean-
ing of the statute is conclusive . . . .”).
With respect to the regulations, FlightSafety argues
that the Validation Clause confirmed its understanding of
Section 2321 because a portion of the Validation Clause im-
plemented the requirements of Section 2321(f).
FlightSafety contends that its position is further supported
by the Noncommercial and Commercial Data Clauses be-
cause the Noncommercial Data Clause included express
provisions for the government to challenge a contractor’s
restrictive markings, whereas the Commercial Data
Clause did not.
FlightSafety’s regulatory arguments fare no better
than its statutory arguments. The Validation Clause did
no more than implement the requirements of Section 2321.
Neither party suggests that the text of the Validation
Clause deviated in any meaningful way from the text of
Section 2321, so our analysis of the statute applies with full
force to the regulatory text.
Indeed, the regulations were even clearer than the
statute itself. Contracting officers were directed to include
the Validation Clause in contracts covering commercial
technical data. See DFARS 227.7102-4(c) (“Use the [Vali-
dation Clause] in solicitations and contracts . . . for the ac-
quisition of commercial items . . . .”); DFARS 252.227-7037
(“As prescribed in 227.7102-4(c) . . . use [the Validation
Clause]”). Moreover, a separate clause applicable to com-
mercial data, DFARS 227.7102-3, incorporated another
provision that clarified that the “Government has the right
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 18
to challenge asserted restrictions when there are reasona-
ble grounds to question the validity of the assertion,” with-
out limiting the grounds for such a challenge to the source
of funding for the data. DFARS 227.7103-13(a) (emphasis
added).9
In sum, we affirm the Board in its ruling that neither
the authorizing statute nor the Validation Clause itself
limited the government to challenging only the funding
source of privately funded data marked with restrictive leg-
ends. The challenge right extended to challenges on the
ground that a contractor’s restrictive markings limit the
government’s data rights.
III
We next consider whether the Board erred in determin-
ing that FlightSafety’s restrictive markings were imper-
missible because they contradicted the government’s
rights.
A
We first address FlightSafety’s Long Marking, which
provided:
9 FlightSafety additionally argues that, even if the
government may bring a challenge to its restrictive mark-
ings, it cannot invalidate those markings or order their re-
moval. This argument is foreclosed by the language of the
Validation Clause itself, which described the circum-
stances under which the government may “cancel or ig-
nore” improper markings. DFARS 252.227-7037(g)(2)(ii).
Notably, “[t]he restrictive markings on the technical data
shall be cancelled, corrected or ignored” if the government’s
challenge is sustained “upon final disposition of [any] ap-
peal or suit” the contractor may file. DFARS 252.227-
7037(h)(i) (emphasis added).
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 19
J.A. 6.
FlightSafety argues that its use of the term “proprie-
tary” was neither ambiguous nor confusing, contrary to the
Board’s decision. FlightSafety suggests that the term
merely comports with the “common understanding and
widespread use” of the word, which applies to “confidential
and trade secret information that must be protected from
disclosure by those who have no license rights to disclose
them.” Appellant’s Br. 44. FlightSafety cites to Depart-
ment of Defense Instruction (“DoDI”) 5230.24 in support,
id. at 44–45 n.10, which defined “proprietary information”
as:
Information relating to or associated with a com-
pany’s products, business, or activities, including,
but not limited to, financial information; data or
statements; trade secrets; product research and de-
velopment; existing and future product designs and
performance specifications; marketing plans or
techniques; schematics; client lists; computer pro-
grams; processes; and knowledge that have been
clearly identified and properly marked by the com-
pany as “proprietary information,” trade secrets, or
company confidential information.
DoDI 5230.24, Glossary, at 29. Under the Instruction’s
guidance, “proprietary information ‘is received with the un-
derstanding that it will not be routinely transmitted out-
side the U.S. Government.’” Appellant’s Br. 45 n.10
(quoting DoDI 5230.24, Glossary, at 29).
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 20
The government counters that the word “proprietary”
in FlightSafety’s legend would require “‘any authorized us-
ers . . . to treat the data as subject to confidential and trade
secret protection,’” thus contradicting the government’s un-
restricted rights to FlightSafety’s drawings. Appellee’s Br.
57 (quoting J.A. 38).
We agree with the government and the Board that the
word as used in the Long Marking contradicted the govern-
ment’s rights. See 23-1 BCA ¶ 38,245 at 185,724. Even by
FlightSafety’s own definition, the term “proprietary” indi-
cated a need for the government to treat the disputed draw-
ing as confidential or to refrain from “routinely
transmit[ing] [the data] outside the U.S. Government.”
DoDI 5230.24, Glossary, at 29. This plainly would contra-
dict the government’s “unrestricted right” to use and dis-
close FlightSafety’s OMIT data. The same problem, of
course, exists with the term “confidential” in the Long
Marking.
FlightSafety next defends the “except as expressly au-
thorized in writing” provision of the Long Marking on the
ground that it did not contradict the government’s rights
because “the Commercial Clause is the very express au-
thorization envisioned in the restriction.” Appellant’s Br.
47.
FlightSafety’s argument strains credulity. On its face,
the phrase contemplated individualized written authoriza-
tion by FlightSafety. Neither the statute nor the Commer-
cial Data Clause contemplated written authorization for
the government’s use of OMIT data. FlightSafety’s re-
quirement for such authorization in its Long Marking thus
contradicted the statutory scheme and the government’s
unrestricted rights in FlightSafety’s drawings.
FlightSafety next suggests that the copyright notice in
its Long Marking was permissible because the Noncom-
mercial Data Clause “permit[ted] a copyright notice under
any circumstance in addition to the legends that are
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 21
variously prescribed dependent on the Government’s
rights.” Appellant’s Br. 47 (emphasis omitted) (citing
DFARS 252.227-7013(f)). If a copyright notice was permis-
sible under the “highly prescriptive Noncommercial [Data]
Clause,” FlightSafety reasons, a copyright notice must also
be permissible under the less restrictive Commercial Data
Clause because the Commercial Data Clause was silent as
to which legends a contractor may use in marking its data.
Id. at 48. FlightSafety further argues that under our deci-
sion in Boeing v. Secretary of the Air Force, 983 F.3d 1321
(Fed. Cir. 2020), “a copyright notice is always permissible
if it is permissible under the [c]opyright statutes.” Appel-
lant’s Br. 48.
FlightSafety’s reliance on the Noncommercial Data
Clause is misplaced. The copyright notice in FlightSafety’s
Long Marking was impermissible because the notice and
its surrounding text did not recognize that the government
possessed a copyright license to the data. Without such a
recognition, the copyright notice was misleading and there-
fore contradicted the government’s unrestricted rights to
the data. In this way, FlightSafety’s copyright notice was
similar to an “unjustified marking” as defined in relation
to noncommercial data. An unjustified marking is “an au-
thorized marking that does not depict accurately re-
strictions applicable to the Government’s use, modification,
reproduction, release, performance, display, or disclosure
of the marked technical data.” DFARS 227.7103-12(b)(1).
Although this definition is not strictly applicable to
FlightSafety’s commercial data, it is a helpful guide to the
problems presented by FlightSafety’s copyright notice.
FlightSafety also misapprehends our Boeing decision.
In that case, Boeing placed the following restrictive mark-
ing on the noncommercial data it provided to the govern-
ment:
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 22
Boeing, 983 F.3d at 1325. The government contended the
legend was impermissible because it did not adhere to the
legends explicitly authorized by the Noncommercial Data
Clause. See id. at 1327. We rejected the government’s po-
sition, concluding that the enumerated legends and their
associated restrictions in the Noncommercial Data Clause
applied “only in situations when a contractor seeks to as-
sert restrictions on the government’s rights.” Id. at 1329.
That was not the situation in Boeing, where the copyright
notice was explicitly directed only to third parties. See id.
We nonetheless explained that “a notice of copyright is
a legend that restricts the government’s rights,” because
“the government’s need for a copyright license serves as the
very indication that the government could, under certain
circumstances, be subject to a suit for copyright infringe-
ment under 28 U.S.C. § 1498 if it exceeds the scope of its
license.” Id. at 1328; see, e.g., Bitmanagement Software
GmBH v. United States, 989 F.3d 938, 951 (Fed. Cir. 2021)
(affirming finding of copyright infringement where Navy
exceeded scope of implied-in-fact copyright license). We did
not decide whether Boeing’s copyright notice did, in fact,
restrict the government’s rights, and therefore did not ulti-
mately determine whether Boeing’s legend was permissi-
ble under the Noncommercial Data Clause. We remanded
the case to the Board to decide whether Boeing’s legend re-
stricted the government’s rights in the first instance. See
Boeing, 983 F.3d at 1333–34.
The copyright notice in FlightSafety’s Long Marking
was materially different from the notice at issue in Boeing.
Unlike the notice in Boeing, nothing in FlightSafety’s Long
Marking purported to limit the copyright notice to the
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 23
conduct of third parties. Instead, FlightSafety’s Long
Marking was directed to all parties, whether governmental
or not. Given this, the Board correctly found that
FlightSafety’s copyright notice impermissibly contradicted
the government’s unrestricted rights license in
FlightSafety’s OMIT data. See 23-1 BCA ¶ 38,245 at
185,725.
B
We next consider the propriety of FlightSafety’s Short
Marking, which provided:
FlightSafety International Proprietary
Rights Reserved
J.A. 6.
As with the appearance of the term “proprietary” in the
Long Marking, the presence of the word “proprietary” in
the Short Marking implied a need for government recipi-
ents of the data to treat FlightSafety’s drawings as confi-
dential and to limit wider dissemination. Such limitations
on the government’s use of FlightSafety’s OMIT data
clearly contradicted the government’s unrestricted rights
in that data.
The reservation of rights in FlightSafety’s Short Mark-
ing was likewise problematic because it did not specify
which rights were reserved nor which rights were granted
to the government. Such ambiguous restrictions impermis-
sibly limited the government’s unrestricted rights in the
data. See DFARS 252.227-7015(b)(1).
C
We finally address FlightSafety’s Alternate Marking,
which provided:
FlightSafety Technical Data provided to the US.
Government with unrestricted rights only pursu-
ant to the requirements in CymSTAR Purchase
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 24
Order PO003174-3 under US Government Con-
tract #FA8621-15-D-6257, DO: FA8621-17-F-6255,
the procedures specified in DFARS 252.227-7015
and limited by DFARS 227.7103-1.
J.A. 6.
FlightSafety defends this marking primarily on the
ground that it recognized that its drawings were “provided
to the U[.]S. Government with unrestricted rights.” Appel-
lant’s Br. 49 (quoting J.A. 6). FlightSafety claims that this
was the “most significant[] phrase of the legend,” and that
the additional terms should be disregarded because they
“merely recited the source of, and did not limit, the Govern-
ment’s rights.” Id. We disagree.
Notwithstanding the Alternate Marking’s acknowledg-
ment of the government’s “unrestricted rights” to
FlightSafety’s drawings, the marking purported to subject
the government’s use of those drawings to “the procedures
specified in DFARS 252.227-7015 and limited by DFARS
227.7103-1.” J.A. 6. Neither of these provisions applied to
FlightSafety’s data, so these citations contradicted the gov-
ernment’s rights.
For example, there were two “procedures specified in
DFARS 252.227-7015” (the Commercial Data Clause). Nei-
ther procedure applied to OMIT data. The first applied to
the data described in paragraph (b)(2) and required the
government to obtain written approval from the contractor
before the government could “[r]elease, perform, display,
disclose, or authorize use of the technical data outside the
Government.” DFARS 252.227-7015(b)(2)(ii). The second
required that, where the government intended to share
paragraph (b)(2) data with “covered Government support
contractors,” the government must have first provided pre-
disclosure notice to the contractor, and the procedure fur-
ther entitled the contractor to require that any new non-
governmental recipient of the data sign a non-disclosure
agreement. DFARS 252.227-7015(b)(3) (limiting
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FLIGHTSAFETY INTERNATIONAL INC. v. AIR FORCE 25
application of procedure to “[t]echnical data covered by par-
agraph (b)(2) of this clause”); DFARS 252.227-7015(b)(2)(ii)
(similar).
As for the second citation in the Alternate Marking,
DFARS 227.7103-1, that provision stated the Department
of Defense’s policy with respect to noncommercial products,
services, or processes. See DFARS 227.7103-1. It had no
application to FlightSafety’s commercial technical data.
Citation to these inapplicable provisions simply served to
confuse the scope of the government’s rights and for that
reason, the Alternate Marking was impermissible.
We are not saying that contractors cannot place restric-
tive markings on their privately funded commercial data,
so long as those markings accurately describe the govern-
ment’s rights in that data. Contractors obviously need to
place such restrictive markings on their data to preserve
their rights. See 10 U.S.C. § 2320(a)(2)(C)(iv); DFARS
252.227-7015(d) (“The Contractor agrees that the Govern-
ment . . . shall have no liability for any release or disclosure
of technical data that are not marked . . . .”). We hold only
that markings that impair the government’s rights are im-
permissible.
CONCLUSION
FlightSafety’s restrictive markings were improper, and
the Board properly sustained the government’s challenge.
AFFIRMED
Costs
No costs.
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