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provide for review of such inventions to deteraine their classification as

Restricted Data.

Any invention reported to either DOE or the PTO found to

contain Restricted Data will be classified in accordance with Chapter 12 of

the Atomic Energy Act.

Paralleling the Atomic Energy Act, the Invention Secrecy Act (35 USC

181-188) allows the PTO to disclose patent applications believed to have

classified subject matter to defense agencies, including DOE.

The details

of the

O's process for making these inventions available and for the

application of secrecy orders under Section 181 have been recently described

to this Subcommittee in the testimony of the Assistant Commissioner of

Patents, Honorable Rene Tegtmeyer. Both the Invention Secrecy Act as

implemented by the PTO, and the Atomic Energy Act, provide somewhat different

but similar restrictions for the handling of inventions or patent applications

classified as Restricted Data or placed under secrecy order.

The secrecy order requires the applicant, before disclosing to others,

to obtain permission from the Pto, which in turn forwards the request to

the agency sponsoring the secrecy order.

This enables DOE to determine if

proper security clearances have been obtained.

Violation of the secrecy

order by the applicant subjects him to criminal penalties (35 USC 186), and

may result in the invention being held abandoned (35 USC 182).


Data must be handled in the manner provided for in Chapter 12 of the Atomic

Energy Act and DOE Order 5650.2, dated December 12, 1978.

If Restricted

Data 18 handled in violation of these requirements, the applicant is also

subject to penalties as provided in Chapter 18 of the Atomic Energy Act.

A patent application circulating under secrecy order within DOE but not


bearing any security markings is handled as if it contains information

classified at not less than the level of "Confidential."

Finally, the Invention Secrecy Act in Section 183 provides that the

owner of any invention who is damaged by the application of a secrecy order

may obtain compensation from the Federal Government.

There is no parallel

provision in the Atomic Energy Act for compensation resulting from the

classification of an invention as Restricted Data.

As to your inquiry regarding patent applications in which the Government

has rights because it was made or conceived by an employee or under a

contract or subcontract, such applications which contain Restricted Data

are filed by DOE with the appropriate classification markings under cover

of a DOE letter requesting that a secrecy order be imposed thereon.


applications have been filed on classified inventions generated by employees

or under our contracts dating back to the days of the Office of Scientific

Research and Development (OSRD) established in 1941 and continuing with the

Atomic Energy Commission (AEC) and its successor agencies, the Energy

Research and Development Administration (ERDA) and now DOE.

With respect to privately developed inventions and patent applications

filed in the PTO, the PTO refers these applications to DOE under Section

151d of the Atomic Energy Act (42 USC 2181d) and Section 181 of the Inventions

Secrecy Act.

When such a patent application bears no security markings,

but is found to contain Restricted Data by DOE, a request for issuance of a

secrecy order is made to the PTO.


In specific response to the inquiries for statistical information, we

have sponsored 1,117 secrecy order renewals in the last year.

of these,

924 were issued on OSRD/AEC/ERDA/DOE generated inventions under Government


of the remaining 193, 117 were issued at the request of foreign

governments under mutual security agreements.

The other 76 renewals were

on privately owned patent applications.

Of those patent applications not owned by DOE on which renewals have

been issued, the average age is 8 years for those secrecy orders requested

by foreign governments, and 11 years for the secrecy orders on privately

owned applications.

In view of the large numbers of DOE-owned patent

applications involved, we have provided the requested information by age of

the secrecy orders in a particular time period in the following ten-year

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DOE has requested the PTO to issue new secrecy orders in the last five

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Regarding the question of whether DOE sponsors secrecy orders on non

Restricted Data inventions, we sponsor many such secrecy orders on our own

patent applications covering inventions that are not Restricted Data but

contain National Security Information.

As you know, Executive Order 12065

does not permit classification of non-government research and development

as National Security Information unless (a) it reveals classified information

to which the producer was given prior access, or (b) the government acquires

a proprietary interest in the product. Accordingly, the Department presently

sponsors no secrecy orders on privately owned patent applications that do

not contain Restricted Data.

In regard to DOE procedures for evaluating requests from inventors for

compensation under the Atomic Energy Act, Section 157 of the Atomic Energy

Act (42 USC 2187) provides for the designation of a Patent Compensation

Board to consider applications for compensation, awards and royalties based

upon claims under the Atomic Energy Act.

In addition, the Board has been

given authority to consider claims based upon the Invention Secrecy Act (35

USC 183).

Since its inception, the Board has considered 40 applications.

Thirty-eight of the 40 applications were for awards and just compensation

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were made for compensation and award under Sections 151, 153 and 157 of the

Atomic Energy Act of 1954, as well as under 35 USC 183.

The claim was

Bettled for $120,000, and all rights in and to the invention were assigned

to the Government without stipulation of which of the several allegations

were relevant to the settlement.

Mr. PREYER. Let me ask you one of the basic questions involved in all of this; a due process question. If we amend the Atomic Energy Act to provide criteria under which information might be classified as restricted data, that is, it would not be publicly available or already publicly acknowledged by the Government, would it be advisable to create a procedural structure for adjudication of disputes which might arise under such criteria?

I am assuming that many of the due process elements that are included in the Administrative Procedure Act would not be appropriate in such a setting, for example, public hearings, on-the-record testify, et cetera. Are there some procedural safeguards which could be implemented to protect the rights of those with property rights in the information without endangering national security? There is no compensation, for example, under the Atomic Energy Act the way there is under the Invention Secrecy Act-could such a process be more efficient and time saving than either the Government injunctive remedy or individual lawsuit? That is an easy question.

Mr. SEWELL. Mr. Chairman, I will take that easy question and turn it over to Mr. Fygi.

Mr. Fygi. Thank you. Your question has several dimensions and assumptions. Foremost among them is that there is at issue with respect to weapon design information a proprietary aspect which, in our reading of the 1954 act, the Congress then resolved concluding that there was to be no such private proprietary interest in weapon design information. In fact, that was among the reasons that the Compensation Board was established in the 1954 act, to provide compensation in the transition, as it were, conceptually from the scheme of the 1946 act. Now that doesn't resolve the entirety of the question, of course, because many of these issues arise in the context of information which is restricted data but is not necessarily directly related to weapon design. For example, some restricted data involves the design of nuclear vessel propulsion plants. Some such restricted data involves the design and technological features associated with isotope separation and other means of uranium enrichment.

As to those types of issues, perhaps there might be some merit in an approach such as you have suggested. But there also would be some costs, I believe, in that the ultimate classification judgments, for example, those that were at issue in the Progressive case, were not only dependent upon technological and scientific fact, but sound judgment in anticipation of what events might occur as a result of proliferation of that type of information. So it is a mixed question of judgment and fact. The judgment was not without its political aspect in the international context. Indeed in this case those judgments were made at exceedingly high levels of Government.

I would propose then that were such a scheme in place that tended to provide an administrative process of some elaborateness for resolving these disputes as they are called, that you would establish such a scheme at the expense of the imposition of that level of judgment that I just described. In other words you would have an ALJ or something like that making decisions that properly are made by a Cabinet Secretary.

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