Dowty Decoto, Inc., a Washington Corporation v. Department of the Navy John Webb, Secretary of the Navy and J.R. Bartel, Captain, U.S.N.

The Navy appeals from a district court’s permanent injunction prohibiting disclosure of a subcontractor’s technical data. We affirm the injunction, holding that under any applicable regulations, the subcontractor never surrendered disclosure rights to the Navy.

The challenged injunction was obtained by the appellee Dowty Decoto, a manufacturer of aeronautical equipment. Since 1971 Dowty Decoto has supplied the Navy with “repeatable holdback bars” used in launching F-14 Tomcat fighter planes from aircraft carrier decks. Decoto has supplied the bars pursuant to a subcontract with Grumman Aerospace Corp., the prime contractor supplying the Navy with F-14s. Decoto also sells the bars directly to the Navy on a purchase order basis for use as spares. In addition to the F-14, Decoto also supplies holdback bars for the F-18 Hornet and T-45A trainer aircraft.

On all drawings and data Decoto supplied pursuant to the subcontract, Decoto placed a restrictive legend stating that the data was proprietary and subject only to limited disclosure rights under the contract. It is not disputed that the form of the legend was appropriate for reserving limited disclosure rights in Decoto.

In 1983…