According to the preferred embodiment, a method is provided for automatically coloring VLSI design elements for the purpose of assigning binary properties to the elements. The preferred method is particularly applicable for use generating phase shift mask designs from VLSI CAD datasets. The preferred method uses net coloring to automatically generate a data set of colored elements. The preferred method is not dependent on the order in which the elements are operated upon. The preferred method has the additional advantage of being able to automatically detect conflicts that prevent the VLSI design from being optimally colored. The preferred method is equally applicable to hierarchical VLSI databases with nested components and traditional flat databases. When applied the hierarchical databases, the preferred method provides element coloring with minimal data flattening required.