It is the Court's opinion that Plaintiff met the burden of substantiating the propriety of the limited rights legend claim, as IEC understood that burden at the time the contract was made.
2. The Government Is Estopped from Denying the Propriety of Restrictive Legends Appearing on Final Reports Submitted by IEC Subsequent to the Government's Acceptance of Report 70-06-04.
The important question raised by the Contractor here is whether the Government has an unlimited right to use and disclose to others for their use detailed design data relating to IEC processes and components allegedly prepared independent of the contract funding and submitted to the Government independent of any contract requirement but as a cooperative response to the request of the Contract Project Engineer. With respect to the above question, the Court assumes as a threshold matter that the Government obtained rights either "limited" or "unlimited," only in the technical data which the Government specified was to be delivered under the contract. The Court refers the reader to Section III, page 652, of this Opinion and where the Court concluded that the Air Force did not order detailed design data of any of the components of either of the systems tested under the contract. Accordingly, the Government did not acquire any rights in data submitted by IEC with restrictive markings that was not part of the data ordered in the contract.
However, the Air Force did obtain possession of the alleged trade secrets as a result of IEC's response to Mr. Rustenberg's request. It is not clear whether the Air Force through Mr. Rustenberg repeated its request for design specifications at the time for submission of each Final Technical Report, however, IEC included the data each time and marked it with restrictive legends. It is the Court's opinion that even in the absence of evidence supporting an express agreement of nondisclosure, IEC's delivery of the data with restrictive legends supports the existence of an implied understanding that the data was received in confidence. It is well settled that in the presence of an implied agreement the Government is liable for the unauthorized use and disclosure of proprietary data. See Horner v. United States, 86 F. Supp. 132, 114 Ct. Cl. 612; Comp. Dec. B-155885, May 1965.
IEC contends that the restrictive legends demonstrate its intention not to deliver the detailed proprietary data to the Air Force with unlimited rights and that the Air Force had no reason to believe otherwise. Plaintiff's position is supported by IEC's effort to obtain the return of its data by revising and resubmitting the Reports containing the challenged markings. In IEC's letters of June 14, 1971 and January 5, 1972, respectively, IEC explained to the Air Force its offer to revise Report 70-06-04 and made clear its intention to retain a restrictive rights interest in the technical data to which it attached a restrictive rights legend in Reports 70-06-04, 71-07 and 71-09. The Air Force never responded to IEC's June 15, 1971 letter but accepted the Report 70-06-04 and paid for it. As a consequence of the Air Force's failure to respond to that letter and the Air Force's decision to issue a Modification to the Contract, Mod. P0006, IEC concluded that the Air Force regarded the restrictive legend on Report 70-06-04 to be proper. IEC proceeded to submit the same data with the appropriate restrictive legends in the next two reports in reliance on the Air Force's informed acquiescence in Plaintiff's assertions regarding Report 70-06-04. The Court believes Plaintiff's reliance to have been justified in light of the Contracting Officer's position upon accepting the report (See Exhibit 1 to Harsfield Deposition). The Government's actions and Plaintiff's reliance thereon have the effect of legally estopping the Government from claiming that the restrictive rights legends submitted on the Reports filed after acceptance of 70-06-04 are improper.
Equitable estoppel prevents the Government's assertion of rights which might have existed had not the Government's conduct rendered it inequitable for this Court to permit the Government to assert these rights against IEC. See Manloading & Management Assoc., Inc. v. United States, Ct. Cl., 198 Ct. Cl. 628, 461 F.2d 1299 (1972).
B. PLAINTIFF WOULD BE IRREPARABLY INJURED WITH SUCH RELIEF.
The Court has concluded that IEC will be irreparably injured if the Government releases the technical data containing IEC's LOMISS processes and components to the public. In taking the position that it is entitled to the data marked with restrictive legends, the Government has conceded the information is of a kind that would permit competitors to reproduce, or as the Government desires, stay far away from producing the IEC processes and components in issue. Obviously, the release of such detailed data would destroy any competitive advantage presently held by IEC.
The harm to IEC by public disclosure is found in the irrevocable loss of a competitive advantage and uncompensable economic hardship. The Court balances this with the administrative burden the Government has complained of in its review of proposals as a result of the delay occasioned by this Court's review of the alleged unfairness in the Contracting Officer's decision. The scales weigh decisively in granting Plaintiff the preliminary relief it seeks. Only a cry of "national security" would turn this Court from its purposeful review of the decision-making process in question here. See Horne Brothers, Inc. v. Laird, 150 U.S. App. D.C. 177, 463 F.2d 1268 (1972).
C. THIS INJUNCTION WILL NOT SUBSTANTIALLY HARM OTHER INTERESTED PERSONS
The Government contends that other defense contractors are restless over the delay in the Government's consideration of their proposals, while it awaits this Court's determination regarding who presently has title to IEC's alleged proprietary data. It is the Court's opinion that defense contractors would experience considerably less anxiety if they were to be assured through the actions of this Court that the Government will not be permitted to act in an arbitrary manner where the protection of their trade secrets hangs in the balance. These contractors must have an extensive interest in the degree to which a contracting official will be permitted to determine that information turned over to government officials in the course of a contract as part of an effort to cooperate with their review of the contractor's work can be released to competitors despite restrictive legends affixed to the information at the time it was submitted.
The interest the Court seeks to safeguard here is central to the welfare of the procurement process as reflected in the Armed Services Regulation set forth below. The Government and the contractors will benefit in the long run from the Court's thorough application of the policy considerations which underlie ASPR 9-202.1, set forth in pertinent part as follows:
" Para. 9-202.1 Background.