necessary determinations on the tens of thousands of applications that would be forwarded each year. Although the size of this task could, no doubt, be diminished with the use of automatic data processing machines, it would still present problems of great magnitude. The bill makes no provision for situations where publication in lieu of patenting may be desirable. Section 6 (a) states that the Administration shall file patent applications wherever the United States has proprietary rights and section 6(b) provides for dedication of patents only. Section 3(a) of the bill concerns inventions made by Government employees. It makes no provision, however, for waiver of rights to the employee where the equities of the situation are compelling, nor do the waiver provisions of section 10 cover Government employees. In the interests of fairplay, it would seem that some provision should be made for waiver of the Government's rights in unusual circumstances. Section 5(e) states that the Administrator of the Federal Patent Administration may delegate authority to other executive agencies for the administration of any proprietary interest of the United States in any invention, if, among other things, such other executive agency shall comply with policies established by the Administration. This provision might imply that an executive agency might not comply with policies established by the Administration. It would seem both unnecessary and undesirable to make such a connotation. We would consider enactment of S. 789 or a bill similar to it to be highly objectionable. This bill, if enacted, would have a significant effect upon the patent policies of this Department and might require the relinquishment of patent rights in many situations where the Government should take title. The act reserves to the Government in most coses only a right to use inventions made in the course of Government contracts and preserves to the contractor the rights to patents for such inventions. This policy would apply except in certain limited situations. Section 3(a) of the bill sets up five categories of inventions to which the Government can take title. These are inventions arising out of contracts where the work required— (1) Is in a field where the Government has been the prime developer and where consideration of national security or public health or safety require close control; (2) Is in a field where the Government has been the sole or prime developer; (3) Is in an entirely new field which would not be developed without substantial Government financing; (4) Could result in inventions which would have to depend on prior work under other Government contracts; or (5) Is intended to produce end items whose use is likely to be required by law. None of these situations covers the aim most commonly encountered in this Department's research: the production of a new process or product intended for use by the public or a specific industry; as for example, desalting of water or coal research. The argument that leaving title to the patents to the contractor will result with greater incentives for the use of investment capital does not withstand careful scrutiny. Many inventions need no further development and are complete when made and are rapidly adopted. Examples of these are the aerosol bomb and frozen fruit juice developed by the Department of Agriculture and "hot carbonate" process for removing acid gases developed by the Bureau of Mines. In many other cases the Government itself undertakes the development work through the cooperation of pilot plants. This is true, for example, in the saline water and coal research fields. In those circumstances the patent incentives are not necessary to get the inventions into use, and to give title to the contractor would be to reward him at the expense of the general economy. It is felt that the five situations specified in the bill are not sufficiently broad to permit the retention of title by the Government in all those situations in which the public interest demands that title be retained for the public welfare. Dealing not only with inventions, the bill also provides for the retention and/or disposition of rights in "inventive contributions," a phrase defined in section 2(g) of the bill but which remains nevertheless so vague as to be practically unworkable. The phrase is meant to apply to any idea used or usable by any Government agency to improve its national procedures or techniques or to apply to use any patented or unpatented item or technical data by any such agency. The use of the concept of inventive contributions implies that the contractor has some proprietary right therein when they are made under the contract. The only way the contractor might have a valuable, enforcible proprietary right in such inventive contributions, however, is by regarding them as trade secrets and maintaining them under secrecy. Under the law of trade secrets once a secret is made known rights thereto disappear. By implication the Government would be obliged to keep these inventive contributions secret to reserve the contractor's rights therein. This would mean that the Government could not publish full and complete reports on any research work done under contract. This would be highly undesirable. Section 3(a) requires the Government to dedicate inventions in which it already has a proprietary interest. This is inconsistent with sections 12 (a) and (b) which provide that the Government may obtain patents on specified classes of inventions and may issue licenses under these patents. If an invention has been dedicated there is no need for the public to acquire licenses since it has the right to use the invention freely without any further formalities. Moreover, dedication is inconsistent with the grant of exclusive licenses provided for in section 12 (b). Section 3(e) provides that the Government may waive its proprietary rights in inventions in certain circumstances. The criteria for such waiver, however, are vague and speculative in the extreme. The net result of the use of these criteria would be that each agency would be subject to extreme pressures by interested parties to waive patent rights in virtually every circumstance. Section 4(a) requires any party entering into a contract to furnish to the executive agency a report on work done under the contract. It is silent about reporting inventive contributions. These should also be reported. To recapitulate, this Department feels that no legislation on this subject is needed, that the enactment of either S. 1809 or S. 1899 would have no significant effect upon our patent policies, once the problems discussed here have been disposed of, and that enactment of S. 789 would have an adverse effect upon our policies and be highly objectionable. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, D. OTIS BEASLEY, Assistant Secretary of the Interior. U.S. DEPARTMENT OF JUSTICE, Hon. JOHN L. MCCLELLAN, Washington, D.C. DEAR SENATOR: Further reference is made to my letter of July 6 with regard to hearings on S. 789, S. 1809, S. 1899 and S. 1047. In accordance with that communication I am forwarding the views of the Department on these measures. Since the Attorney General's 1947 Report to the President on Investigation of Government Patent Policy the Department of Justice has consistently taken the position that title to patents which are the fruits of Government-financed research should normally go to the Government. It has been our view that waiver of the Government's proprietary rights should occur only in situations where compelling considerations favor waiver, and then only after identification of the invention involved, as a general rule. We have earnestly opposed waiver prior to invention, except in emergency situations. However, concerned with the wide diversity of practice among Government contracting agencies and the lack of adequate empirical study of the problems involved in administering Government patent policy, the Department of Justice acquiesced in issuance in October 1963 of the President's Statement of Government Patent Policy. It was our belief that the policy statement would provide an experimental basis for developing a consistent application of general principles and clarifying existing issues. There is no doubt that substantial steps have been taken since the issuance of the statement toward a more consistent approach among the various agencies. While there is also no doubt that some experience has been accumulated which sheds some light on basic policy issues which disposition of these patent rights presents, it is our view that the experience accumulated to date is insufficient to warrant legislative action. We believe further experience and study is needed under the President's policy, before this matter is resolved. The flexibility and experimental nature of the policy statement, reflected in its provisions for review and change where experience suggests, afford a desirable means for ascertaining the policy and practices most in the public interest. The rigidity of a statutory enactment will destroy this opportunity for development; therefore we are opposed to legislation at this time. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely, RAMSEY CLARK, Deputy Attorney General. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, Hon. JAMES O. EASTLAND, Chairman, Committee on the Judiciary, DEAR MR. CHAIRMAN: This is in reply to your request for the comments of the National Aeronautics and Space Administration on the following bills concerning Federal patent policy: S. 789 introduced by Senator Saltonstall, S. 1047 introduced by Senator Williams of New Jersey, S. 1809 introduced by Senator McClellan, and S. 1899 introduced by Senator Long of Louisiana. The Saltonstall, McClellan, and Long bills are each intended to establish national policy with respect to property rights in inventions resulting from federally financed research and development. The Long bill would establish a new Administration, the Federal Inventions Administration, within the executive branch to administer a uniform policy governing the disposition of rights to inventions made by Government employees and under Government contracts. The Saltonstall and McClellan bills would also establish a Government-wide patent policy; however, this policy would be administered by the individual departments and agencies having the research and development responsibilities. Moreover, the Saltonstall and McClellan bills would affect only inventions made in the course of or under contracts of these departments and agencies, and not inventions made by Government employees. The Saltonstall bill has a provision regarding claims against the various agencies based on the infringement by these agencies of privately owned patents. And the Williams bill deals exclusively with such infringement claims. Based primarily on a belief that there is insufficient experience and data under a Government-wide patent policy upon which to determine the necessity or advisability of a new Federal Inventions Administration, NASA considers that it would be premature to establish such a new agency at this time. Accordingly, NASA favors the approach taken in the McClellan and Saltonstall bills of leaving to the departments or agencies having the research and development responsibilities the administration of whatever Government-wide policy is established regarding the disposition of rights in resulting inventions. This view is reinforced by NASA's conviction that its patent program is an integral part of NASA's overall effort to transfer the results of space-related research and development to the national economy, and its effort to stimulate inventive activity in the space-related sciences. As such, the NASA patent program is closely interrelated with NASA's total effort to attain the goals and objectives set forth by Congress in the National Aeronautics and Space Act of 1958. A brief outline of NASA's present patent policies will place the comments on the various bills in better context. The NASA patent policies, and the practices implementing these policies, are founded both upon section 305 of the National Aeronautics and Space Act of 1958, 42 U.S.C. 2457, and upon the Presidential Memorandum and Statement on Government Patent Policy issued by President Kennedy on October 10, 1963 (28 Fed. Reg. 10943). Section 305 of the Space Act is unique among the various Federal statutes dealing with patent policy. Essentially, this section provides that any invention conceived or first actually reduced to practice in the performance of work under a NASA contract, upon prescribed determinations by the Administrator, becomes the exclusive property of the Government, "unless the Administrator waives all or any part of the rights of the United States to such inventions in conformity with the provisions of" section 305 (f). This latter section in turn authorizes the Administrator “under such regulations in conformity with this subsection as" shall be provided, to "waive all or any part of the rights of the United States under this section with respect to any invention or class of inventions made or which may be made by any person or class of persons in the performance of any work required by any contract [defined in section 305 (j) as 'actual or proposed contract'] of the Administration if the Administrator determines that the interests of the United States will be served thereby." The clearest statement on the intent of Congress in enacting section 305 was made by House Speaker McCormack who in 1958 was the House majority leader and the chairman of the select committee of the House of Representatives considering the Space Act. In submitting to the House of Representatives the report of the conference committee which drafted section 305, Speaker McCormack noted: "The patent provisions of the House bill is the only part of the bill extensively revised by the conferees. The Senate version carried a patent provision closely similar to the provision in the House bill. This was dropped by floor amendment just before passage in the Senate in order to allow this section to go to conference. "The review and the redrafting were wise. The select committee created a special subcommittee to study the matter, and after talking with many experts in and out of Government arrived at a new version. The original patent provision was too closely patterned after the stringent requirements in the Atomic Energy Act which are not fully applicable to the space field. The substitute provision agreed to by the conferees protects both the interests of the Government and affords enough flexibility to the Space Administrator to let him meet needs for preserving the incentives of the individuals and companies whose efforts it is public policy to encourage." The first NASA waiver regulations issued in 1959 to implement section 305 were patterned to some extent after the approach followed by the AEC, which also is subject to statutory patent provisions but only with regard to inventions in the nuclear energy field. In line with this approach, NASA's initial regulations provided generally that the Government would take title to inventions which were closely related to the field of space technology. Thus, inventions related to this new field of space technology were treated in a manner analogous to AEC's handling of inventions in the field of nuclear energy. As NASA's concepts of the utilization of technology emanating from its program matured with experience, however, this initial approach seemed inadequate. In the Space Act, Congress had given NASA a clear mandate to preserve the role of the United States as a leader in aeronautical and space science and technology as well as in the application of this science and technology to the conduct of other activities. The patent procedures of NASA, and the broad waiver authority given to the NASA Administrator, should, it was felt, be carried out in a way best suited to achieve these statutory objectives by harnessing the patent system within the framework of normal patterns of commercial competition to stimulate inventive activity, to foster effective reporting of innovations and inventions, and to transfer the results of this activity to the national economy. A closer view of space technology also revealed, what now seems obvious, that the fields of technology involved are of great breadth and diversity, embracing literally the whole spectrum of science and technology. In carrying out its mission, NASA conducts active research programs in such unrelated fields as rocket engines and microelectronics; in lubricants and paints and in lightweight computers and tape recorders. A partial list of the fields in which NASA conducts research includes lens design, medical electronics, nutrition, biology, batteries and power supply design, valves, pumps, storage tanks for cryogenic fluids, plasma-physics, motor design, nuclear research, fiberglass technology and solar cells, in addition to the uniquely space-related fields of satellite systems design and launch vehicle systems. A substantial portion of NASA's research and development, representing approximately 50 percent of NASA's R. & D. budget, is conducted in the field of electronics. Unlike the area of nuclear energy, many of these fields of technology are not ones where the major development costs have been borne by the Government. For these reasons, in 1962 NASA decided to revise its waiver regulations to reflect more effectively these facts and to provide a more positive spur to the utilization of inventions in the economy. At the same time, safeguards were included to prevent companies from achieving positions of dominauce as a result of NASA's waiver policy. The revised regulations proposed in 1962 were never issued by NASA, because, as they were being discussed and further revised, the effort within the executive branch to draft a Government-wide statement of patent policy for issuance by the President had started to show real promise. It was felt that if NASA, within the framework of section 305 of the Space Act, could adopt waiver regulations that followed a Government-wide policy, such an action would be the only responsible course to take. The effort within the executive branch, of course, resulted in the issuance of the President's patent policy, a policy which synthesizes the opinions and policies of virtually every Federal agency having research and development responsibilities. While recognizing that "it is not feasible to have complete uniformity of practice throughout the Government in view of the differing missions and statutory responsibilities of the several departments and agencies," a major purpose of the President's policy is to establish "greater consistency in agency practices" and to provide a basis for this consistency. The President's policy recognizes that "a single presumption of ownership does not provide a satisfactory basis for Government-wide policy on the allocation of rights to inventions." As a basic consideration, the policy also recognizes that: "The public interest in a dynamic and efficient economy requires that efforts be made to encourage the expeditious development and civilian use of these inventions. Both the need for incentive to draw forth private initiatives to this end and the need to promote healthy competition in industry must be weighed in the disposition of patent rights under Government contracts." Essentially three contract situations are dealt with in the Presidential guidelines: (1) Those in which the public interest is best served by the Government normally acquiring the principal or exclusive rights to all inventions made under the contract; (2) those in which it is desirable for the contractor to retain these rights; and (3) those instances where a decision cannot be reached at the time of contracting and where the allocation of rights to a particular invention is determined only after the invention has been identified. Where the purpose of the contract is to develop items for use by the general public, or to explore into fields directly related to the public health and welfare, or where the contract is in a field of science or technology principally developed by the Government and where the acquisition of exclusive rights might confer upon the contractor a preferred or dominant position, the President's policy requires that the Government acquire the principal or exclusive rights to resulting inventions at the time of contract. This is true also in instances where the services called for by the contract are for the operation of a Government-owned facility or for coordinating the work of others. In other situations where the purpose of the contract is to build upon existing technology in fields of technology in which the contractor has an established nongovernmental commercial position, it is the President's policy to permit the contractor to retain commercial rights to any inventions, subject to a broad royalty-free license to the Government. Where the commercial interests of a contractor are not sufficiently established at the time of contracting, a determination of rights to inventions is deferred until after the invention has been identified. Whenever the principal or exclusive rights to an invention are retained by a contractor, he must take effective steps to work the invention within 3 years after issuance of a patent covering the invention so that the benefits of the invention are reasonably accessible to the public. If the contractor fails to take such steps, NASA, under the President's policy, has the right to compel royaltyfree licensing of the invention. To retain commercial rights, the recipient of a waiver must respond to yearly inquiries regarding the commercial use being made of the invention. Also, to the extent that the invention is required for public use by Government regulation, or as may be necessary to fulfill health needs, NASA has the right to compel commercial licensing either royalty free or upon reasonable terms. Moreover, where waiver of rights is made at the time of or immediately after contracting, in order for the waiver to be effective with respect to any particular invention, this invention must be reported promptly to NASA, and the contractor must file a patent application on the invention within 8 months of reporting. This provides a self-serving incentive for contractors to identify, document, and report to NASA inventions made under NASA contracts. Prior to issuance of the President's policy statement, there was an almost complete lack of uniformity among the several agencies engaged in research and development in allocating rights to inventions made under Government con |