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PRELIMINARY REPORT AS TO THE PATENT PRACTICES OF
THE DEPARTMENT OF THE TREASURY
I. LEGAL AUTHORITY AS TO PATENTS
The Treasury Department's procurement and research activities are carried on primarily by the Coast Guard, the Bureau of Engraving and Printing, and the Bureau of the Mint and are not guided by any statutory patent rights provisions.
Research and development in the Bureau of the Mint, which is responsible for the manufacture of coins, the melting and smelting of silver, gold, and alloys for minor coins, and the assaying of metals and bullion, is being performed entirely by operating officials in the field institutions under the general supervision of the technical consultant to the Director of the Mint and his assistant. Most of the developments resulting from this program consist of modifications or adaptations of metal processing equipment to the Mint's special needs. These adaptations could be patentable.
The Coast Guard assists other governmental agencies, such as the Internal Revenue Service, Custom Service, and Immigration Service in enforcing all applicable Federal laws on the high seas, and a primary responsibility is to promote safety on the high seas by means of regulations, icebreaking facilities, maritime navigational aids, air navigational aids, rescue stations, loran stations, buoys, and other aids. In further carrying out these activities, a limited amount of research and development, mostly through contract, is conducted by the Coast Guard.2
The Bureau of Engraving and Printing designs, manufactures, and supplies almost all the major U.S. financial issuances (stamps, bonds, paper money, etc.). Among its activities are the designing and drafting of specifications for equipment, developing electronic production methods, and conducting chemical, metallurgical, and engineering studies, both experimental and developmental. It prepares studies in spectrography, spectrophotometry, microscopy, photomicrography, photography, and rheology, and it also formulates and develops printing inks, glue, paper pigments, oils and varnishes. This work is conducted by the Bureau through contracts 4 and by means of its own facilities, and it is aimed at developing deterrents to the counterfeiting of U.S. securities, to improving production and quality, and to decreasing costs. At present, in addition to the Chief, the Office of Research and Development Engineering of the Bureau consists of the Research Branch with a staff of 10, the Engineering and Development Branch with a staff of 11 and a clerical unit. There
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fore, the employees and the contractors for both the Bureau and the Coast Guard have opportunities to create inventions.
By direction of the President, the Secretary of the Treasury has sometimes refused entry to the country of certain patented items in accordance with 19 U.S.C. 1337 (a) for the purpose of preventing unfair competition. However, his functions in connection with the administration of this statute are primarily ministerial.
Public Law 85–934 of the 85th Congress, 2d session, September 6, 1958, also granted to the Department of the Treasury, together with other governmental agencies, authority to issue grants for research to nonprofit organizations.
II. PRESENT PRACTICE
A. ADMINISTRATION 1. Personnel
There is no patent attorney in the Department of the Treasury or any of its agencies, nor is any staff member specifically assigned to patent matters. The Office of the General Counsel of the Department of the Treasury is charged with the responsibility of presenting to the Department of Justice, for processing through the Patent Office, applications for patents on inventions made by Treasury employees. These inventions are brought to the attention of the General Counsel by a report made by a responsible officer of any bureau, office, or division of the Department of the Treasury of any development created by an employee that is deemed to constitute an invention. The General Counsel has the duty to determine the responsibilities of the Department and the rights of the Department and the employee. 2. Performance statistics
As of August 21, 1959, the Department owned only two patents, which are:
Only seven patents were assigned to the Treasury Department from July 1, 1937, through July 31, 1958. Five of these were assigned by the employee inventors to the United States, as represented by the Secretary of the Treasury, and two were received as collateral to secure the payment of tax.
During the period July 1, 1937, to July 31, 1958, the Treasury Department, itself, did not file or process any applications for patents.
B. POLICY AS TO RETENTION OF TITLE
1. By employees
The Department, in determining domestic rights of inventions made by its employees, is governed by Executive Order 10096, dated January 23, 1950. The records of the Department indicate that in * 15 Federal Register 389.
all cases in which patents have been granted to employees, the Government has obtained a royalty-free license for use and manufacture of the invention for governmental purposes. Prior to the promulgation of Executive Order 10096, the Treasury Department's patent policy as to employees was governed by the so-called common-law rule set forth in U.S. v. Dubilier Condenser Corp. Promulgation of Executive Order 10096 has had a negligible effect upon the actual operation of the Department's policy in dealing with employees. 2. By contractors and grantees
The Department of the Treasury believes that the patent policy of the U.S. Coast Guard should be the same as the policy of the Department of Defense, since the Coast Guard is an armed service of the United States and in time of war or national emergency operates directly under the Navy. Thus the invention and patent provisions of the Coast Guard procurement contracts are in accord with the pertinent provisions of the Armed Services Procurement Regulations (ASPR), which allows the contractor to retain all right, title, and interest to any developed invention under such contracts. With respect to research and development contracts which have been entered into, some are in accord with the patent provisions of the Armed Services Procurement Regulations relating to procurement contracts whereby the Government relinquishes all rights to the invention whatsoever.8 In some others, however, the contractor retains title but the Government receives à royalty-free license to manufacture and use the invention, in accordance with ASPR research and development contract regulations.
Under the present provisions of these contracts there is no requirement that the Coast Guard be advised of pertinent technical information, know-how, or specialized practices, which may be developed. Regarding research and development contracts, under which the contractor retains title but the Government retains a royalty-free license to manufacture and use the inventions, the Coast Guard follows the Department of Defense practice and normally does not retain the right to technical information, know-how, and specialized practices developed.
What rights are retained by the Coast Guard depends entirely upon the judgment of the contracting officer. There are no Treasury Department patent regulations requiring the retention by the Government of any rights to inventions arising out of research and development contracts.
The Bureau of Engraving and Printing policy and practice in contracting for either research and development or procurement is to retain à royalty-free, irrevocable license to manufacture and use all devices and appurtenances invented and/or patented after the date of the contract award, and which relate to the subject of the contract. 10 In some instances the contracts also contain a clause whereby the contractor grants to the Government a royalty-free, irrevocable license to use any of his patented processes which may be necessary 8 289 U.S. 178 (1932). 7 Letter dated Jan. 13, 1959, to Hon. Joseph C. O'Mahoney, chairman, Subcommittee on Patents, Trade
marks and Copyrights, Committee on the Judiciary, from Nelson P. Rose, General Counsel Department of the Treasury.
8 App. B, p. 11.