Mr. PREYER. It may be that if other questions develop as these hearings go forward, we would want to hear from you again. The whole question of restrictions on information developed independent of Government supervision by scientist, mathematicians, and so forth is certainly a very difficult legal problem, and a very difficult Constitutional problem on which there has not been much guidance. Before we go into that, we have just heard Dr. Moore testify. I realize that Dr. Moore is currently involved in civil litigation against the Government, and the Department normally does not comment on such ongoing litigation. We have tried to avoid the specifics of the litigation in this hearing and instead to focus on the process of the Invention Secrecy Act. However, in fairness, since he has testified to some extent about it, does the Department have any general comment it wishes to make on the testimony of Dr. Moore or the problems his testimony highlights? Mr. Foy. Mr. Chairman, as you point out, I cannot comment about Mr. Moore's case in particular. I think it is clear that the legal procedures established by statute in cases like this do not always do justice in individual cases. I do not know whether that is the case in the case of Mr. Moore. Regarding the general question of restricting the use of new ideas that might be patented, I do have a couple of general observations which I think should be kept in mind as we consider the equities in case like this one. The first point is that not every new and useful idea is patentable. There are many kinds of new and useful ideas that are not patentable, and no suggestion has ever been made, that I know of, that when a patent is properly denied under our laws, the denial itself amounts to a taking of property that requires compensation. One way of looking at the Invention Secrecy Act is to look at it in that light. What the Invention Secrecy Act says in effect is that there are some inventions that are too dangerous to be disclosed in the way that a patent normally discloses the invention, and the patent will not issue for such an invention at least for a time. The second observation I have to make is that even in a case where patent rights can be acquired, they are acquired subject to lawful regulations restricting their use. The classic example of that sort of think is the case where an individual of a company acquires a patent in a new drug but then is unable to market it and profit by it because the FDA does not find the drug safe and effective and will not allow it to be sold. I think that is simply an application of the general principle that whenever you or I acquire property, we take it subject to existing, valid regulations restricting it use. If I buy a plot of land, and existing zoning regulations require it be kept in its natural state, I have no claim for loss occasioned by that regulation simply because I wanted to build a shopping center on it. Those are observations of a general nature. I will be happy to answer any other questions you have. Mr. PREYER. I think the legal issues here are interesting ones and difficult ones which we will be exploring. I want to call on our staff counsel to outline a few questions that will give you some indication of the way we would like to proceed in the future with your testimony. Before calling on him, I will first recognize members of the subcommittee if they have questions. Mr. Evans? Mr. EVANS. No, Mr. Chairman. Mr. KINDNESS. No, Mr. Chairman. Mr. DRINAN. No, Mr. Chairman. I just want to thank the witnesses. I regret that I simply could not be here at an earlier time. Just for my own information, I would ask Mr. Foy if he could describe, at least in general, the inventions that were developed within the FBI and with respect to which the Justice Department asked for secrecy. Mr. Fox. Mr. Drinan, I do not know what those inventions were, the reason being that they are under a secrecy order. They were developed by employees of the Department in the Federal Bureau of Investigation. That is about all I can tell you. Mr. DRINAN. All right. It was simply to satisfy my curiosity. I yield back the balance of my time. Mr. PREYER. Thank you. Mr. WEISS? Mr. WEISS. Not at this time, sir. Thank you. Mr. PREYER. I recognize Mr. Ingram. Mr. INGRAM. I might follow up on Father Drinan's question. How many secrecy orders are there now in effect, would you say, involving Justice Department- Mr. Fox. There are three orders that the Justice Department sponsored or requested, and each of them involves an invention or claim that was made by an employee of the Department itself, not by private citizens or others. Mr. INGRAM. How far back do they go? Were they first invented some years ago? Mr. Foy. The claims were filed, I believe, in 1952 and in 1953. I would like to add to the written statement I have submitted with my testimony. There are three existing orders that the Justice Department has requested. In the history of the Invention Secrecy Act there have been more, but they are no longer in effect. However, the Justice Department, for obvious reasons, is not involved in this sort of business and there have not been very many of them. Mr. INGRAM. The Department is named as a defense agency for the purposes of the Invention Secrecy Act. Is there any need to continue the Department as a defense agency under the act, since its role, practically speaking, has been nonexistent? Mr. Foy. There may very well not be. Mr. INGRAM. I see. As I understand it, one of these inventions may involve an undetectable telephone tap. Is that your understanding, or do you have any knowledge of the three inventions? Mr. Foy. I just do not know. Mr. INGRAM. Does the witness wish to elaborate further on that reply? [No response.] Mr. INGRAM. One of the difficulties we saw was that of the private inventor, such as Dr. Moore, who will submit something to the Patent Office. It will be classified and the backup documents will be classified. He will not have access to that in formulating a possible case. The FBI employee, on the other hand, or the Government employees who seeks a patent, may have a distinct advantage over the private inventor. Would the FBI employees, for example, who invented these three inventions currently covered by a secrecy order have access to the relevant materials and backup documents explaining why the secrecy order was issued? Mr. Fox. I just do not know in those particular cases. They might well know more, simply by virtue of their employment, than a private individual would know, but I would point out that there are judicial procedures available whereby sensitive information can be submitted to a court and determinations made on the basis of it. The fact that in these cases you do have to deal with sensitive information is a problem, but there may, in some instances, be ways of surmounting it. For example, cleared counsel is a very common device used by the courts these days to handle problems of this kind. It may be that we need guidance from Congress on this point, but what I am suggesting is that the problems encountered in a case like Dr. Moore's may be ones that can be ameliorated or overcome to some degree by some inventive lawyering or legislation. Mr. INGRAM. Any thoughts the Department might have further on that would be appreciated. Let me turn for a minute to the Department of State's International Traffic in Arms Control Regulations, commonly known as ITAR. On May 11, 1978, the Office of General Counsel of the Department of Justice issued a legal opinion on the constitutionality under the First Amendment of ITAR restrictions on public cryptography. The opinion was addressed to Dr. Frank Press, who is the Science Adviser to the President. It concluded that, It is our veiw that the existing provisions of the ITAR are Unconstitutional insofar as they establish a prior restraint on disclosure of cryptographic ideas and information developed by scientists and mathematicians in the private sector. Your statement does not refer to the OLC opinion and its finding of unconstitutionality of portions of the ITAR. Could you explain why your statement does not include a reference to that opinion? Mr. Foy. There was no intention on my part to obscure or hide the fact that we issued an opinion. Our opinion was, of course, referred to in your inquiry to the Department. The remarks in the written statement are addressed to two things that happended after our opinion was issued. If I may back up for a minute and address the opinion itself, the opinion was directed at the broad issue that was raised by the possibility of a broad application of the ITAR regulation. The ITAR regulation is written so broadly that it could be applied in cases in which very serious first amendment problems would be presented. What happened after our opinion issued was, first, that the ninth circuit, in a case called Edler, sharply limited the scope of the ITAR regulation. It said that an individual cannot be punished for failing to comply with the licensing procedure established by the regulation unless, in effect, he knowingly participated in a combination of some sort whereby he provided technical assistance to a foreign enterprise or group knowing that that assistance was going to be used in the manufacture or use of weapons of war. That is very narrow interpretation of that regulation, and I think it goes a long way to curing the constitutional problems that would be created by an application of the Licensing system to routine publications of scientific ideas in this country. The second thing that has happened since our opinion is that the State Department itself, through its office of Munitions Control, has issued an interpretation of the regulation which parallels the ninth circuit's view and narrows the effect, ameliorating to some extent the first amendment problems created by the regulation on its face. That is the state of things as I see it. Mr. INGRAM. What form has the State Department's interpretation taken? Has there been a formal change of the ITAR regulation? Mr. Foy. The regulation is still in the form it was in when our opinion was issued. The Office of Munitions control has issued a bulletin that explains how it understands the regulation. In fact, it is an interpretation of its regulation. It is a formal public document and I will be happy to provide it for the record. Mr. INGRAM. If you would, please do. Mr. PREYER. Without objection, a copy of the bulletin will be included in the record at this point. [The material follows:] DEPARTMENT OF STATE Washing, DC 20520 MUNITIONS CONTROL NEWSLETTER NO. 80 7 CRYPTOGRAPHY/TECHNICAL DATA Concern has been voiced that ITAR provisions relating so the export of technical data as applied to cryptologic equipment can be so broadly interpreted as to restrict scientific exchanges of basic mathematical and engineering research data. The Office of Munitions Control wishes to clarify the application of the technical data provisions of Section 121.01, Category XVIII, of the ITAR as applied to equipment found in Categories XI (c) and XIII (b) of the Munitions List. Cryptologic technical data for which a license is required under Section 121.01, Category XVIII, is interpreted by this office with respect to information relating to Munitions List items in Categories XI (c) and XIII (b) to include only such information as is designed or intended to be used, or which reasonably could be expected to be given direct application, in the design, production, manufacture, repair, overhaul, processing, engineering, development, operation, maintenance or reconstruction of items in such categories. This interpretation includes, in addition to engineering and design data, information designed or reasonably expected to be used to make such equipment more effective, such as encoding or enciphering techniques and systems, and communications or signal security techniques and guidelines, as well as other cryptographic and cryptanalytic methods and procedures. It does not include general mathematical, engineering or statistical information, not purporting to have or reasonably expected to be given direct application to equipment in such categories. It does not include basic theoretical research data. It does, however, include algorithms and other procedures purporting to have advanced cryptologic application. The public is reminded that professional and academic presentations and informal discussions, as well as demonstrations of equipment, constituting disclosure of cryptologic technical data to foreign nationals, are prohibited without the prior approval of this office. Approval is not required for publication of data within the United States as described in Section 125.11(a)(1). Footnote 3 to section 125.11 does not establish a prepublication review requirement. |