use the product or process being developed under the contract; i.e., manufacturing data is generally required. Another unique feature is a requirement that the contractor must agree to license others to use, for water desalination purposes, any "proprietary data" relating to products or processes being developed under the contract (except that data related to items developed at private expense need not be licensed).

Problems in Acquisition and Use of Data

Recommendation 9. Amend or repeal statutes limiting agency flexibility concerning rights in technical data.

Recommendation 10. Undertake, through the Federal Council for Science and Technology in coordination with the Office of Federal Procurement Policy, to develop and evaluate the implementation of a statement of Government policy on rights in technical data supplied under Government contracts. Give specific consideration to the relationships between prime contractors and subcontractors.

Recommendation 11. Authorize agencies to acquire information and data.

Most of the issues arising from the Government's acquisition and use of data are interrelated. Some of these these interrelationships concern the quality of that data to be protected by the Government, the system by which protection is afforded, the manner by which notice of protectable status is given, the system for verifying that data claimed to be protectable meets the definition, and the remedies for misuse of protectable data. Thus, an inadequate system for safeguarding protectable data adversely affects a contractor's willingness to accede to the Government's requirements for data and the willingness of some firms to participate in Government procurement.

The complexity of issues involved has led to a proliferation of approaches, as reflected by the regulations of the various Government agencies. As noted above, AEC, NASA, and DOD have basic differences in their approach

to important data issues. Since there are no Government-wide policies on the subject of data, each Government agency has been free to develop its own policy. Complete uniformity is probably neither achievable nor desirable, but we believe greater uniformity should be sought.

NEED FOR GREATER UNIFORMITY

After examining the data rights policies of the various agencies, we have concluded that it is not practical at this time to establish any single, Government-wide, data policy by legislation. The varying needs, capabilities, and missions of the agencies appear to militate against the creation of a single policy. Yet, the great diversity of relatively intricate clauses and regulations governing this area can obviously work hardships on contractors. Accordingly, we believe greater uniformity is within reach. While a single data clause might be impossible, perhaps standard clauses could be developed from which agencies could select the ones best suited to their needs.

19

Accordingly, we have concluded that the time has come for the development of a Government-wide policy on technical data. The Federal Council for Science and Technology in coordination with the Office of Federal Procurement Policy, should be responsible for developing such a statement and for evaluating its implementation. In view of the work that the Federal Council for Science and Technology has done in the related patents area, the Council is the natural body to turn to for the coordination of efforts in the technical data area. We recognize that major improvements will not occur overnight, but believe, based on developments in the patents area, that out of such an effort will eventually evolve greater understanding of the problems and issues and greater agreement as to how they should be resolved.

To facilitate this effort any statutes limiting flexibility in this area should be appropriately amended.

Section 14 of the draft legislation at Appendix A contains a series of amendments which would accomplish Recommendation 9. How

19 Our recommendation for such an office is in Part A.

ever, since those amendments also impact on patent rights policy, additional drafting effort would be needed if it were desired to change only those aspects of the statutes impacting on data rights policy.

SUBCONTRACTOR DATA

Numerous issues would confront those developing a Government-wide data policy. We call attention to one area in particular. There have been numerous complaints over the years by subcontractors of overreaching by prime contractors with respect to subcontractor data. Not surprisingly, prime contractors. have denied this. We believe that whatever may be the merits of this controversy, attention should be given to this facet of data policy. Consideration should be given to whether it is administratively feasible for Government agencies to exert through appropriate contract provisions greater pressure on prime contractors to respect the rights of their subcontractors. At present, some agencies, for example DOD, do allow subcontractors to submit "limited rights" data directly to the Government. Consideration should be given to whether this policy should be extended and in what ways it might be strengthened.

AUTHORITY TO ACQUIRE TECHNICAL DATA

All agencies should be authorized by legislation to acquire rights or interests in technical data and information. Although agencies probably have such power inherently, the issue is confused because a few agencies have been given such authority expressly. To eliminate any confusion, we see a need to grant such authority Government-wide.

Section 6 of the draft legislation at Appendix B would serve to accomplish our Recommendation 11.

DATA SUBMITTED WITH PROPOSALS AND/OR IN CONFIDENCE

One way in which new ideas and innovations are transmitted to the Government is

through the submission of proposals to it, either solicited or unsolicited. Information of a technical nature may also be supplied in a number of ways other than as part of a proposal. As discussed more fully in Part B on Research and Development, it is important that the lines of communication between the Government and those with innovative ideas be kept open.

Where valuable data is supplied to the Government as part of a proposal or other related types of communications, contractors will often place legends containing restrictive limitations on such data allowing it to be used only for evaluation purposes. Some agencies have now adopted adopted regulations prescribing standard legends and establishing policies with respect to the manner in which they will use such data. While there are differences in these policies, in general these efforts appear laudatory and are to be encouraged. However, many agencies have no regulations covering the treatment of data submitted with proposals.

Need for Greater Uniformity

Recommendation 12. Undertake, through the Federal Council for Science and Technology in coordination with the Office of Federal Procurement Policy, to develop and evaluate the implementation of a statement of Government policy on the treatment of data submitted with proposals or other related communications.

We have reviewed agency policies in this area, but cannot supply any set policies. Varying agency missions, organizations, and capabilities may require different attitudes toward the use of data submitted with proposals. Hence uniform legislation would not appear useful. The executive agencies should be free to develop their own policies in this area.

While we conclude that a Government-wide legislative statement is not feasible, we do believe that the development of Governmentwide guidelines and, perhaps, uniform alternate policies would be helpful. To this end, we recommend that the Federal Council for Science and Technology in coordination with

the Office of Federal Procurement Policy undertake an effort to develop a uniform policy statement relating to the treatment of data submitted with proposals or related communications. Follow-on studies of the implementation of such a statement and its effects should then be conducted. We believe that, just as has occurred in the patents area, such a statement with follow-on studies could lead eventually to a much greater understanding of the issues involved and a greater agreement as to how these issues should be resolved. The result of such efforts should be to facilitate the flow of information to the Government.

Remedies

Recommendation 13. Establish a remedy for the misuse of information supplied to the Government in confidence.

We also see a need for an additional ingredient to facilitate the flow of information to those agencies that wish to encourage it. A remedy for the misuse of data that is supplied in confidence is needed.

Despite established policies and regulations, the possibility remains that through oversight, or otherwise, use or exposure may be made of data that is contrary to stated regulations. Yet, there is no clear-cut judicial remedy available to a person supplying information in confidence to the Government to obtain relief for the breach of that confidence. The lack of such a remedy has a deterrent effect, albeit a difficult one to ascertain and probably in the majority of cases of minor consequence, on the flow of technical information to the Government. Because we believe that it would conform to fundamental notions of fairness, and in view of the beneficial effect it might have on the flow of information to the Government, we recommend the creation of a remedy for Government misuse of data supplied in confidence.

Under current law, unless a breach of contract action can be framed under 28 U.S.C. § 1346 or 1491, normally not a real possibility with regard to the submission of proposals, no judicial remedy for the violation of "trade secrets" by the Government exists. There are

a few isolated statutes of rather limited scope that would allow such suits, but the basic statute authorizing actions against the Government for its tortious actions, the Federal Tort Claims Act,20 has generally been construed as not allowing suits based on trade secret grounds.21 While 18 U.S.C. § 1905 does establish criminal penalties against Government personnel who unlawfully disclose confidential data, this does not aid the damaged party.22

To accomplish our recommendation, proposed legislation is provided in Section 6 of the bill at Appendix B to this part. It should be noted that this bill, as drafted, covers a broader range of Governmental misuse than simply the misuse of data submitted with proposals. An action might be brought under it, for instance, for the misuse of data supplied to a regulatory agency for a limited purpose. In this regard, the draft legislation is not unlike the criminal provisions of 18 U.S.C. § 1905, which are not limited to contract-related breaches of confidence.

One reason we have proposed a broad statute is that, as a purely technical drafting matter, it has been found extremely difficult to develop wording that would limit the remedy only to contract-related data submissions. Not all technical submissions are necessarily supplied as "proposals." More importantly, it is felt that the principles set forth in the draft should apply to all dealings by the Government. If a Government agency misuses data which was, in the language of our proposed legislation, "submitted to or obtained by" it "in confidence and under conditions limiting its use for specific purposes," no sound reason is seen why

20 28 U.S.C. §§ 1346 (b), 2680 (1970).

21 See generally, Harris, "Trade Secrets as They Affect the Government," 18 Business Lawyer, 613 (1963). Consider Alkiebolaget Bofors v. U.S., 194 F.2d 145 (1951).

22 18 U.S.C. § 1905 reads as follows: "Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined not more than $1,000, or imprisoned not more than one year, or both; and shall be removed from office or employment."

the Government should not be liable for any damages flowing from such misuse.

In connection with the creation of this remedy, Government agencies should be given the authority to settle claims prior to suit being instituted.

It is to be emphasized that we do not believe that this proposal will open flood gates to litigation against the Government. In the case of proposals, for instance, it will be within the power of the agencies to establish by regulation their policies toward data submitted

with proposals and to indicate how they plan to use such data. Presumably, then, such agency regulations would establish the parameters of the agency's potential liability. A standard marking for such data could be prescribed, as several agencies now do. Data marked otherwise could be rejected. Similarly, regulations could be adopted as to other data submitted in confidence. Hence, the agencies could ensure that they have mechanisms to control their potential liability with respect to information flowing to them.

CHAPTER 4

Copyrights

The Constitution authorizes the Congress to establish a system granting authors exclusive rights in their writings for a limited time. Title 17 of the United States Code sets forth the conditions and procedures for obtaining such rights.

The owner of a copyright has the exclusive right, among others, "to print, reprint, publish, copy, and vend the copyrighted work." 1 This right generally extends 28 years with renewal possible. And, as set forth at 17 U.S.C. § 5, a variety of items such as books, maps, films, works of art, and photographs, to name only a few, may be copyrighted.

Legislative Background

As in the case of patents, there is no single statute governing the question of who is to obtain copyrights in works produced under Government contracts. But many of the same statutes cited in the discussion of patents also affect copyright policy. Thus, some statutes might be interpreted as barring certain Government agencies in some cases from allowing contractors to claim copyrights in material generated under their contracts.

In the treatment of private copyrights, 28 U.S.C. § 1498 (b) establishes a framework similar to that of 28 U.S.C. § 1498 (a) with respect to patents, except that § 1498 (b) grants agency heads authority to settle, prior to suit, claims that might be brought under that statute. Only a few agencies have been given express authority to acquire interests in copyrights independent of the settlement of a claim. And 17

117 U.S.C. § 1(a) (1970). 217 U.S.C. § 24 (1970).

U.S.C. § 8 generally prohibits the copyright of Government publications. Hence, with limited exceptions, agencies cannot copyright their own works. This contrasts with the situation in the patents area in that patent rights may be obtained by the Government in its inventions.

Issues and Underlying Considerations

Recommendation 14. Amend or repeal statutes limiting agency flexibility in dealing with the publication of works developed under Government contracts.

Recommendation 15. Enact legislation giving all agencies authority to acquire private copyrights or interests therein.

The ultimate aim of any Government policy with respect to the granting or limiting of copyrights in works developed under Government contracts should be to disseminate to the public the material involved. As in the case of patents, depending on the follow-on efforts contemplated by the agency, it may be necessary to grant exclusivity in order to get publication and dissemination of the work. Obviously publishers will not generally be interested in investing in the marketing and promotion of works that others could then copy at a reduced cost.

There are variations in law and economic realities which differentiate copyright problems from patent problems so that a simple analogy with patents policy is not realistic. It must be recognized that the anticompetitive effects that may flow from allowing contrac