The intellectual property issue finally boiled over when the engineers who left BBN to start their own company made a pointed request for their former employer to turn over the IMP source code. When BBN refused, they appealed to DARPA. While keeping source code proprietary is usually the prerogative of the company that develops it, the IMP source code was different, for it had been developed by BBN with federal funds. Moreover, BBN was in the midst of starting up the TELENET subsidiary, which would be competing with the company started by the engineers.

