Dowty Decoto, Inc. v. Department of the Navy

883 F.2d 774 (1989)

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Dowty Decoto, Inc. v. Department of the Navy

United States Court of Appeals for the Ninth Circuit
883 F.2d 774 (1989)

  • Written by Liz Nakamura, JD

Facts

Dowty Decoto, Inc. (Decoto) (defendant) supplied repeatable holdback bars, which are used to launch fighter jets from aircraft carriers, to the Navy (plaintiff) through a subcontract between Decoto and Grumman Aerospace Corporation, the prime contractor supplying the Navy with F-14 fighter planes. Decoto developed its holdback bars to the point of workability, at Decoto’s sole expense, prior to entering into the subcontract with Grumman. Decoto did not request any research or development funding. Decoto marked all drawings and data it supplied to the Navy with the statutorily required markings stating that the data was proprietary and subject only to limited disclosure rights. After some time, the Navy asked Decoto to modify its holdback bar design to extend its longevity, which Decoto did. Extending the longevity required altering the original holdback bar design; Decoto requested reimbursement from the Navy, through Grumman, for costs associated with the requested modifications. Several years later, the Navy informed Decoto that (1) Decoto had failed to prove the Navy was only entitled to limited disclosure rights in Decoto’s technical data; and (2) the Navy planned to use Decoto’s technical data to obtain competitive bids for unrelated procurement contracts. Decoto filed for a preliminary injunction under the Administrative Procedure Act (APA), stating that the Navy’s disclosure of Decoto’s proprietary technical data would violate the Trade Secrets Act. The Navy countered, arguing that it had unlimited disclosure rights to Decoto’s technical data because it reimbursed Decoto for the Navy’s requested longevity modifications to Decoto’s holdback bar design. The district court granted the injunction. The Navy appealed.

Rule of Law

Issue

Holding and Reasoning (Schroeder, J.)

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