Intellectual Property Issues in Reverse Engineering Luis Miguel (Mike) Acosta, Associate Counsel, IP Law, MARCORSYSCOM Presenting his Personal Views March 26, 2019

Reverse Engineering: Legal & Ethical US Intellectual Property Laws (Patents, Copyright, Trade Secret) provide different mechanisms by which the owner of IP may protect those interests, within the boundaries set by these laws. Outside of those boundaries, it serves public policy to encourage innovation based on advances, most often incremental, built on existing technology. Unless these prohibit copying, copying is both legal and ethical. While reverse engineering is likely to lead to copying, reverse engineering alone is legal (and ethical). PGI 217.7504: Reverse Engineering is last preference for Competitive Acquisition of Replenishment Parts by Contracting Activity

The Big Two: Patents and Data Rights BLUF Government Rights in Technical Data and Patent Law considerations are the two aspects of Intellectual Property Law that most significantly impact Reverse Engineering The first is relevant to the way in which the Government’s reverse engineered tech data file is generated. The second is relevant to the actual making, using and selling of the build made with reverse engineered data.

Patents and Reverse Engineering The Owner of a US Patent is granted a limited monopoly to exclude others from: Making Using Selling Advertising; or Importing While the objective of Reverse Engineering (RE) may be to make the object, RE alone does not constitute patent infringement.

Copyright Copyright Act, 17 U.S.C. § 102: Copyright protection subsists in original works of authorship fixed in any tangible medium of expression The owner of a copyright is granted the exclusive right to: 1) reproduce the work; 2) prepare derivative works; 3) distribute; 4) display; and 5) perform the copyrighted work. A significant limitation of copyright, however, is that ownership of a valid copyright in a work does not foreclose the independent creation of that work by someone else Idea/Expression Dichotomy: Copyright Act, § 102(b) provides that: "In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.“ Thus Copyright does not protect Functional Features and should not be an impediment to Reverse Engineering

Government’s Right to Take a Compulsory License to any Patented or Copyrighted Work 28 U.S.C. §1498(a): Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture. 28 U.S.C. §1498(b): [Basically, the same thing for Copyrighted Works]

Trade Secret Uniform Trade Secrets Acts defines a Trade Secret as follows: Information, including a formula, pattern, compilation, program, device, method, technique, or process, that: derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

Contractual Limitation Some legal instruments expressly prohibit reverse engineering: Software Licenses (routinely do this) Confidentiality Agreements (NDAs) Contracts Sales Documentation May Conflict with First Sale Exhaustion Doctrine If Reverse Engineering is planned, don’t get bound by such Agreements Seek Legal Counsel before committing Government to such terms

Trademark Law Trademarks are any sign, symbol or insignia which in the public mind has come to be associated with a single source of origin for goods or services. Represents the good will that the public has in the quality of the goods or services. Infringement constitutes use a mark which is likely to cause confusion as to the true source of origin of the gods or services BOTTOM LINE: DON’T COPY ANY TRADEMARKS WHEN REVERSE ENGINEERING

Government Rights in Technical Data The Government’s rights in contract deliverable noncommercial technical data are prescribed by statute (10 U.S.C. §2320) and its implementing regulation (DFARS 252.227-7013). The level of these data rights is a function of which party funded development and what type of data it is. The greatest restriction a contractor can impose on the government, i.e., lowest level of government data rights, is Limited Rights. Other levels: Unlimited, Government Purpose, Specially Negotiated, Restricted Rights for Software. With only Limited Rights, the government cannot use that data for manufacture, organic or otherwise, and cannot distribute that data to third parties (with limited exceptions). Currently, SBIR Data Rights in technical data is also Limited Rights.

What DoD Distribution of Technical Data is Allowed? Multiple Factors May Limit DoD Distribution of Tech Data: Contractor’s Restriction e.g., Limited Rights DoD Distribution Statements Export Control Laws & Regulations Classification Other? e.g., Destruction Notices

Summary Chart: Data Rights and Patent Law End Point: AM made Part Two possible problems: Q1. Patent Problem Q2. Data Rights Problem Q 1: Patented? Starting Point: OEM Part (i.e., hardware) Q2: Ltd rights Tech Data? RED LIGHT Path 2: Gov’t creates data file using OEM’s TDP by: a. Copying Ltd Rights TDP from OEM; or, b. Supports Rev Eng effort with gov’t personnel familiar with Ltd rights TDP; or c. “Validates” Rev Eng data via a. or b. above GREEN LIGHT Path 1: Gov’t Creates Data File by: By hand; or By clean Rev Eng effort, usually scanning but also manually Patent Problem: The owner of a US Patent has the exclusive right, within US territories, to make, use, sell, advertise, or import the patented item, or to use the patented process. If the part falls within the scope of any claim of a valid patent, it doesn’t matter what path was taken to get to the end point; making that part constitutes patent infringement. Even if the Government prevails in a patent infringement lawsuit and damages are avoided, the time and effort in defending is a significant drain on limited resources. Nevertheless if circumstances warrant, the government can use its statutory right to take a compulsory license. Educated decision makers should weigh the consequences of exercising the compulsory license against the necessity of the infringement, with legal guidance when necessary. Data Rights Problem: It may be tempting to support the development of the AM tech data build file though use of a TDP delivered to the government by the OEM of that part. If that TDP is restricted by a valid Limited Rights restrictive legend, the statute precludes the government from a) precluded from giving that tech data to a third party (without OEM permission); and b) is prohibited from using that data to manufacture, EXCEPT FOR “emergency repair and overhaul.” Similarly, validation of the government produced TDP by comparison with the OEM’s Limited Rights TDP (e.g., “adjusting” the Government TDP to more accurately reflect the OEM data) would likely be problematic. Except for emergency repair, the government must create its own data file by a “clean” reverse engineering effort that does NOT use the Limited Rights TDP and does not use personnel familiar with that TDP. If use of the Government TDP for sustainment (rather than emergency repair) cuts into OEM profits, the OEM will be motivated to challenge (lawsuit?) the Government TDP, so the Government “clean” reverse engineering effort must be well documented. Trademark and Copyright Guidance: Don't copy any trademarks when reverse engineering the hardware to develop the AM TDP. Copyright should not be an issue as copyright protection covers aesthetic, but not functional, aspects of a work; if it is an issue, the Compulsory License entitlement will kick in.

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