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Office. These are ordinarily filed by the Government or Government contractors. The applicant, contractor assignee and attorney

prosecuting the patent application all know the identity of the Government agency requiring classification markings and subsequently requesting issuance of the secrecy order.

In a few cases, the Office issues secrecy orders in applications which when filed did not contain security classification markings. In 1979, for example, 43 such secrecy orders were issued. At the time of filing, the Office cannot know, of course, if the application should have been filed with security classification markings or if any government agency has an interest in the application.

Several years ago, the Office and the defense agencies began developing a more informative and understandable secrecy order. We were successful and the new secrecy order will be utilized soon. Among its improvements, it will identify the agency requesting the secrecy order.

The sixth question asks about the compensation of applicants whose applications are subject to secrecy orders. It goes on to ask whether the statutory right to compensation is illusory or real, and whether practical benefits have, in fact, been obtained.

Rights under 35 U.S.C. 183 for securing "just compensation" for governmental use or damages resulting from a secrecy order are

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provided in the same section. The applicant on receiving a Notice of Allowability may administratively claim compensation for money damages caused by the order. Claims for compensation are directed to the head of the agency responsible for the secrecy order. If full settlement is not effected, the applicant may sue the United States in the Court of Claims or an appropriate Alternatively, the applicant, on issue of the

District Court.

patent, may sue the United States in the Court of Claims for damages the order caused.

I regret that I cannot answer from first-hand knowledge your questions about the effectiveness of these remedies.

Nevertheless,

I understand that twenty-nine administrative claims for compensation have been filed since 1945 with the Defense Department. Of these, five are the subject of pending litigation, three were settled by the Defense Department before litigation, five were settled during litigation, one was the subject of a private relief bill, ten were terminated by denial and the remainder are pending in the Defense Department.

(7) The seventh question asks about the placing of classification markings on applications, the procedures applicable to these classified applications and the restraining effect of security classifications on applicants.

As I have mentioned before, the great majority of patent applications under secrecy order are filed by the Government or Government contractors. In most of these cases, the security classification

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is put on the patent application by the owner when it is filed. Government agencies and their contractors ordinarily know exactly what technology is classified, and act accordingly.

Security classification markings for any document, including patent applications, are imposed by virtue of Executive Order 12065 (or earlier Executive Orders) or the Atomic Energy Act. Under Executive Order 12065, security classification markings can only be placed on documents in which the Government has a proprietary interest. This Executive Order is qualified, however, by the Atomic Energy Act. Under that Act, a security classification marking may be placed on a document involving nuclear technology, even though the Government does not have a proprietary interest.

Applications containing security classification markings when

filed are reviewed to determine whether such markings are authorized. This authorization is usually found in documents accompanying the application. If the authority appears proper, the application is subjected to a secrecy order.

Nevertheless, the time for issuing the secrecy order may vary, depending upon agency practice. Some agencies request secrecy orders at the time of filing. Other agencies do not request a secrecy order until later notified that the application has actually been filed. In substantially all applications, however, a secrecy order is issued before the application is examined.

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If the authority to apply a security classification marking is not apparent, the Office asks the appropriate agency if it has the authority. If no authority exists, the Office deletes the marking, and the application, of course, is not subjected to a secrecy order.

Applications bearing valid security classification markings but not yet subjected to a secrecy order are nevertheless safeguarded in the same manner as those already subjected. As I mentioned,

an application may bear a valid security classification marking before being subjected to a secrecy order. Before a secrecy order is imposed, the classification markings still restrain the applicant from disclosing his invention. The extent of his restraint, as well as any penalty for disregarding such restraint, is provided under the security classification system by which the application was marked in the first place.

The penalties for unauthorized disclosure of an invention subject to a secrecy order may differ from those provided under the security classification system. Until such secrecy order has been placed on the application, however, its specific provisions for restraint and penalties cannot be invoked against the applicant.

Attached to my written statement are various exhibits that should help the Subcommittee understand and evaluate the Office's part in protecting national security. These are a compilation of forms used for security cases (including a soon-to-be-utilized secrecy order), the more important parts of the legislative history of the patent law's security provisions and a functions and information chart of our processing procedures for securityrelated applications.

This, Mr. Chairman, concludes my oral testimony. Mr. Quar forth and I would be happy to answer any additional questions you may have.

LEGISLATIVE HISTORY

$2D CONGRESS 1st Session

HOUSE OF REPRESENTATIVES

{

REPORT No. 1028

PROVIDING . FOR THE WITHHOLDING OF CERTAIN PATENTS THAT MIGHT BE DETRIMENTAL TO THE NATIONAL SECURITY

September 24, 1951.—Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. ROGERS, from the Committee on the Judiciary, submitted the following

REPORT

[To accompany H. R. 16S7}

The Committee on the Judiciary, to whom was referred the bill (II. R. 4687) to provide for the withholding of certain patents that might be detrimental to the national security, and for other purposes, having considered the same, report favorably thereon with amendment and recommend that the bill, as amended, do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof the following:

That whenever publication or disclosure by the grant of a patent on an invention in which the Government has a property interest might, in the opinion of the head of the interested Government agency, be detrimental to the national security, the Secretary of Commerce upon being so notified shall order that the invention be kept secret and shall withhold the grant of a patent therefor under the conditions set forth hereinafter.

Whenever the publication or disclosure of an invention by the granting of a patent, in which the Government does not have a property interest, might, in the opinion of the Secretary of Commeren, be detrimental to the national security, he shall make the application for patent in which such invention is disclosed available for inspection to the Atomic Energy Commission, the Secretary of Defense, and the chief officer of any other department or agency of the Govern ment designated by the President as a defense agency of the United States.

Each individuel to whom the application is disclosed shall sign a dated acknowledgment thereof, which acknowledgment shall be entered in the file of the appliestion. If, in the opinion of the Atomic Energy Commission, the Secretary of a Defense Department, or the chief officer of another department or agency so designated, the publication or disclosure of the invention by the granting of a patent therefor would be detrimental to the national security, the Atomic Energy Commission, the Secretary of a Defense Department, or such other chief officer shall notify the Secretary of Commerce and the Secretary of Commerce, shelf order that the invention be kept secret and shall withhold the grant of a potent

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