-9 rights available under patent law section 261. The secret part is used for recordings when neither the record itself or an index card can be made public without jeopardizing national security. The agency seeking registration, not the Office, decides in which part a governmental interest will be recorded. (1) Questions Raised by the Subcommittee The first question asks about the effect of the 1976 National Emergencies Act on the Office's implementation of the Invention Secrecy Act. With enactment of the National Emergencies Act, all existing emergencies were considered terminated for the purposes of the patent law's secrecy order provisions. The Office was accordingly required to apply the "peacetime" provisions of section 181 in lieu of the national emergency provisions. Of course, the "wartime" provisions did not apply at that time. During a national emergency, or war, section 181 requires secrecy orders to be issued for their duration and for a specified period Exactly the opposite is true under the section's "peacetime" provisions. thereafter. Under the "peacetime" provisions, each secrecy order must be reviewed annually to assure that the national interest justifies it. This annual review determines whether or not the order is -10 to be renewed. The National Emergencies Act became effective on September 14, 1978 and terminated the national emergency declared by President Truman in 1950. The transitional provisions of section 181 implementing this Act required the defense agencies to affirmatively determine for each patent application subject to a secrecy order the need for continuing that order. The Office received a written notice of each determination by the defense agencies and, in turn, issued any needed notices of renewal. The review of these outstanding secrecy orders during this transitional period (from September 14, 1978 to March 14, 1979) resulted in 3,300 renewals. A national emergency was in effect from December of 1950 to March of 1979, and secrecy orders for patent applications did not need annual reviewing for that entire period. Otherwise, each secrecy order would have been subject to annual review. Patent applicants, however, are not forced to await the results of an annual review to have their applications declassified and secrecy orders removed or modified. If an applicant requests the rescinding of a secrecy order in his application, a review is automatically initiated. In July of 1974, our Office requested each defense agency to review secrecy orders in effect for more than twelve years. This review program lasted until the National Emergencies Act took effect in 1979. (2) The second question asks about the security operations of That Department the Department of Justice as a "defense agency". -11 was designated a defense agency for the purposes of 35 U.S.C. 181 under Executive Order 10457, of May 27, 1953. To date, the Department of Justice has not informed us of any fields of national security interest in connection with patent applications. We would, of course, make any application available to that Department on its request, without imposing criteria of our own for doing this. The Justice Department would be treated like any other defense agency. (3) Your third question asks about the relationship between secrecy orders and our appeal procedures for finally-rejected patent applications. You specifically refer to section 5.3 (a) of Chapter 37, Code of Federal Regulations. This section states that appeals will not be set for hearing by the Board of Appeals until the secrecy order is removed or unless otherwise specifically ordered by the Commissioner. Although there is no specific statutory authority for this regulation, it has been promulgated under the Commissioner's general administrative authority (35 U.S.C. 6) for several important reasons. Until recently, few members of the Office's Board of Appeals and its supporting staff possessed the requisite security clearances for handling these appealed cases. The same is true of the judges, officers and staffs of courts that review decisions of the Office's Board of Appeals. -12 Also, most applications under secrecy orders are related to Government property interests. The Government is generally reluctant to disseminate classified information to a wide range of persons, even if they have security clearances. Nor can a patent issue unless the secrecy order is rescinded. Thus, it was not deemed desirable to expend further efforts and funds in pursuit of a procedure that could not culminate in the prompt issuance of a patent. Of course, 37 CFR 5.3(a) is worded so that a sufficiently important appeal hearing can be ordered by the Commissioner, if the applicant petitions for it. For instance, a delay in the appeal proceeding may prejudice the right to compensation. In such a case, the appeal may be heard. To my knowledge, however, the only requests for these appeals have been filed by defense agencies for Government- owned and prosecuted cases. If an appeal hearing were ordered by the Commissioner and the invention found unpatentable, the application, absent further appeal to the appropriate court, would be considered abandoned. Each secrecy order, however, remains in effect until rescinded or lapsed whether or not the application is abandoned. (4) Question four asks about the seeming inconsistency between the statutory authority to appeal a secrecy order to the Secretary -13 of Commerce and the CFR's implementing regulations interposing the condition that the applicant's appeal must be first taken to the Commissioner of Patents and Trademarks. There is really no inconsistency. The right of appeal to the Secretary of Commerce, as provided by statute, must be made The Secretary has It certainly is in the best interests of national defense and the applicant himself to have an appeal heard and decided at the lowest qualified administrative level. The applicant is assured that a decision on his petition for removal of secrecy order will be decided by persons most knowledgeable in a prompt, efficient, and economical manner. The Secretary of Commerce will then have their advice if he later must decide the matter. (5) The fifth question asks about the form of the secrecy order and why it does not identify the agency requesting it. The question goes on to ask how and when the applicant learns the identity of the agency requesting the order, and whether or not we are considering a revised form identifying the agency. The vast majority of patent applications subject to secrecy orders already contain classification markings when filed in the |