The U.S. Court of Appeals reinstated yesterday a conflict-of-interest indictment against James A. Conion, a former director of the Bureau of Engraving and Printing.

U.S. District Judge Louis F. Oberdorfer had dismissed the charge in October, ruling that the government had failed to spell out specific acts that it alleged violated the conflict-of-interest statute. Without those details, Oberdorfer said, the statute would be unconstitutionally vague. Conlon had argued, among other things, that more information was needed to prepare a defense in the case.

In an opinion for the appeals court yesterday, however, Senior Judge David L. Bazelon wrote that the language of the statute was clear enough to give people of "ordinary intelligence" warning of what conduct was prohibited by that law.

The indictment charged that Conlon had illegally participated in a proposal for an anti-counterfeiting contract between the federal government and the American Bank Note Co., which hired Conlon as its president one day after he resigned in 1977 as director of the Bureau of Engraving and Printing. Conlon had denied any wrongdoing.

At the time of his participation, Conlon was "negotiating" with the company and had an "arrangement" concerning future employment with them, the indictment alleged. Oberdorfer dismissed the charge, saying the government had to be more specific about the alleged "negotiating" and the "arrangement," but the appeals court disagreed.

The two terms "are not exotic or abstruse words, requiring detailed etymological study or judicial analysis," Bazelon wrote. "They are common words of universal usage."

Moreover, Bazelon said, when Congress drew up the law, it intended that its words be given a broader construction, not necessarily the narrow reading that Oberdorfer would have required. Bazelon was joined in his opinion by Chief Judge J. Skelly Wright and Judge Malcolm R. Wilkey.

The general rule, Bazelon said, is that an indictment can be patterned on the words of the statute, as in the Conlon case, as long as enough detail is supplied to inform the defendant of the particular charge against him.

The charge filed in the Conlon case was "by no means a model indictment," wrote Bazelon, who commented that the government was stingy with the details it made available to Conlon. Nevertheless, Bazelon said, the indictment was sufficient.

Larry S. Gondelman, who represents Conlon along with attorney Plato Cacheris, said yesterday that no decision had been made on whether to ask the full appeals court to hear the case or whether to take the issue to the U.S. Supreme Court for review.

The appeals court yesterday also affirmed Oberdorfer's decision to dismiss three perjury charges against Conlon because the charges were improperly vague.