Published in the Daily Bugle, March 15, 2024
I take great joy in basing J&C topics on Oscar winners for Best Music (Original Song), and this year came through in spades[1]. While Barbie was otherwise snubbed[2] its theme song is perfect when it comes to J&C.
Obviously, I’m referring to the (b)(5) release of “specially designed.” This sub-paragraph came late in the development of the paragraph (b) releases, when one astute observer asked “what if I don’t know what I’m making my product for?” While the question’s wording generated a chuckle at the time[3], it reflects a real scenario.
Many companies make items useful in multiple applications, and periodically produce upgrades as technology advances. Your company makes a range of digital to analog converter (DAC) chips, and are used in a wide array of electronic equipment, including car stereos, industrial machines, and avionics. While last year’s chip had a settling time of 450 microseconds, this year’s version gets it down to 425[4].
All is well until the first batch is bought by a Large Defense Contractor for use in a developmental aircraft. While most of the aircraft’s funding is internal R&D, they took $1.50 in funding from DoD[5]. The aircraft is VIII(f) – Developmental aircraft funded by the DoD, and the entry includes “specially designed parts, components, accessories, and attachments therefore.”
While the DAC chip has no properties peculiarly responsible for being in a developmental aircraft with DoD funding (paragraph (a)(1)), the chip most definitely is used in or with it. The trap is closed due to (a)(1); it is up to paragraph (b) to open it or the chip is also VIII(f)[6]. Assuming no CJ in place, (b)(1) is out, ditto for (b)(2) as a DAC is not a fastener. Paragraph (b)(3) is of no help as this is the first use of this iteration of the chip; it’s therefore not used in a non-ITAR product. Because the settling time is faster than the last version (presumably is being used in at least one non-military product), the performance of the new one is not “the same.” We’re down to (b)(4) and (b)(5)[7].
On the surface, (b)(4) and (b)(5) but with one key difference. With (b)(4), you must have positive knowledge that it was developed for use in both ITAR and non-ITAR items. With (b)(5), you don’t need to have knowledge of specific end uses during development, just that it is a general purpose device with no specific end-uses. The changes to performance are just the normal forward march of technology useful for all applications – faster, more accurate, less power, and not targeted at a specific use.
Essentially, if you can answer “What Was I Made For?” then you need to evaluate (b)(4). However, if like the Oscar-winning song, you’re musing on an unanswered question, then evaluate (b)(5).
Both (b)(4) and (b)(5) – and (b)(6) in the EAR – have a requirement for “documents contemporaneous with its development” that establish the elements of those entries. This is often the greatest stumbling block of the later (b) paragraphs –the analysis is sometimes years after the fact and the documents lost, or even if recent, the design intent wasn’t documented. The (b)(4) threshold requires documentation showing both ITAR and non-ITAR design intent. For (b)(5), you only have to show that it’s a general purpose device and you didn’t design it specifically for a military purpose.
For (b)(5), a general purpose device would have multiple applications, and since this is aimed at evolutionary, not revolutionary items, and evidence of diverse past uses (“high probability of its existence or future occurrences”) can satisfy this requirement. While the changes (faster, more accurate, less power…) are useful for military applications, they are not specific to them, and are equally useful for commercial products.
I’m relieved that “I’m Just Ken” didn’t win, as I’d drawing a blank. Suggestions?
Got J&C questions? – please reach out to me at ArtOfJC@arinovis.com
[1] I was all set to discuss Cat IV(h)(16) ignitors if The Fire Inside won.
[2] C’mon Academy – movies don’t direct themselves!
[3] And a decade plus later, still does.
[4] In an electrical engineer’s world, this is a Great Accomplishment and worthy of taking the design team to Buffalo Wild Wings.
[5] Technically, it was a $75.3 million DoD contract, but after overhead, contracting costs, Starbucks, and profit, that’s all that went to actual development
[6] There is an entire separate discussion on if the chip is an element of a higher assembly used with the aircraft but not controlled in VIII(f), but to keep this under novel length, just go with this example, OK?
[7] This analysis is equally applicable to “specially designed” under the EAR.