PROVIDING FOR THE WITHHOLDING OF CERTAIN PATENTS

7

will grant to the Government a permanent right which is possessed by many foreign countries in dealing with their patents.

Lt. Col. Willard J. Hodges, Jr., testified before the Subcommittee' on Patents on August 21, 1951, that-

at is believed essential that there exist in this country laws which will permit a faeign inventor to file an application in the United States Patent Office and have Sach application placed under an order of secrecy, In order to fulfill this Nation's treaty obligations and reap the full benefits of such joint undertakings, the enactment of this legislation is required.

Although this may prevent a person who first applies for a patent in the United States from availing himself of the 12-month priority period afforded by article 4 of the International Convention for the Protection of Industrial Property with respect to inventions kept secret under order of the Secretary of Commerce, the executive department favors this bill because of its importance to national defense and because the bill is believed to attain its objective in a reasonable manner. Furthermore, if the bilateral agreements which the country is presently executing with the North Atlantic Treaty countries are consummated, it is anticipated that classified information will be afforded the same degree of security in certain other countries as we propose for this country in this bill. Accordingly, as a practical matter, the inventor will probably be permitted in most instances to file an application in those countries to avail himself of the 12-month priority period despite the secret nature of the invention.

Basically, the bill does not make changes in existing law with respect to its administration. Since the passage of Public Law. 700, it has been administered in close cooperation with the defense agencies. The examiners of the Patent Office submit applications to the Patcut Ollice Defense Division to determine whether they disclose inventions important to defense, and the Secretary of Defense has appointed a Patent Advisory Board to consult with the Division and assist in the determination of the applications which should be maintained in secrecy. If enacted, the Defense Department would continue to have access to pending patent applications selected by the Secretary of Commerce which in his discretion would be detrimental to the national security if disclosed.

CHANGES IN EXISTING LAW

In compliance with clause 2a of rule XIII of the House of Representatives, there is printed below in roman existing law with matter proposed to be stricken out enclosed in black brackets and new matter proposed shown in italic. The bill as amended by the committee is set forth after the proposed matter:

AN ACT OF CONGRESS APPROVED JULY 1, 1910 (Puntie Law No. 700, 76ти Cosc.) [That the Act of Congress approved October 6, 1917 (40) Stat. 391, ch. 95, U. S. C., title 35, sec. 42), be amended to read as follows:

"Whenever the publication or disclosure of an invention by the granting of a patent might, in the opinion of the Commissioner of Patents, be detrimental to the public safety or defense he may order that the invention be kept secret and withhold the grant of a patent for such period or periods as in his opinion the pational interest requires: Provided, That the invention disclosed in the application for said patent may be held abandoned upon it being established before or by the Commissioner that in violation of said order said invention has been published or disclosed or that an application for a patent therefor has been filed in a foreign comtry by the inventor or his assigns or dental representatives, without the consent or approval of the Commissioner of Patents.

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PROVIDING FOR THE WITHHOLDING OF CERTAIN PATENTS

"When an applicant whose patent is withheld as herein provided 25l faithfully obeys the order of the Commissioner of Patents above referred ... tender his invention to the Government of the United States for its use, he if and when he ultimately receives a patent, have the right to sue for count tion in the Court of Claims, such right to compensation to begin from the stare the use of the invention by the Government: Provified, That the SecreisWar or the Secretary of the Navy or the chief officer of any established den. agency of the United States, as the case may be, is authorized to enter .. agreeinent with the said applicant in full settlement and compromise for damage accruing to him by reason of the order of secrecy, and for the use of invention by the Government.”

Sec. 2. This Act shall take effect on approval and shall remain in force fe; x. period of two years from such date.]

AN ACT OF CONGRESS APPROVED JUNE 16, 1942 (PUBLIC LAW 239, 77ru Cos. [That the Act of Congress approved July 1, 1940 (Public, Numbered 700, Sever to sixth Congress, third session, ch. 501), be amended by adding the following sectio "SEC. 3. No person shall file or cause or authorize to be filed in any for. country an application for patent or for the registration of a utility model. »dustrial design, or model in respect of any invention made in the United States except when authorized in each case by a license obtained from the Commissins; of Patents under such rules and regulations as he shall prescribe.

"SEC. 4. Notwithstanding the provisions of sections 4886 and 1887 of 1. Revised Statutes (35 1. S. C.. sees. 31 and 32), any person and the successor assigns, or legal representatives of any such person shall be debarred from receiv :: 2 a United States patent for an invention if such person, or such successors, assign or legal representatives shall, without procuring the authorization prescribed r section 3 hereof, have made or consented to or assisted another's making appl cation in a foreign country for a patent or for the registration of a utility moi industrial design, or model in respect of such invention where authorization in such application is required by the provisions of section 3, and any such Uniteg States patent actually issued to any such person, successors, assigns or legal representatives so debarred or becoming debarred shall be invalid.]

[SEC. 5. Whoever, during the period or periods of time au invention has been ordered to be kept secret and the grant of a patent thereon withheld pursuant to the Act approved July 1. 1910 (Public, Numbered 700, Seventy-sixth Congress, third session, ch. 501), -hall, with knowledge of such order and without di authorization, willfully publish or disclose or authorize or cause to be published or disclosed such invention, or any material information with respect thereto, »: whoever, in violation of the provisions of section 3 hereof, shall file or cause or authorize to be filed in any foreign country an application for patent or for the registration of a utility model, industrial design, or model in respect of any invention made in the United States, shall, upon conviction, be fined not more than $10,000 or imprisoned for not more than two years, or both.

"Src. 6. If any provision of this Aer or of any section thereof or the application of such provision to any person or circumstances shall be held invalid, the remainder of the Act and of sich section and application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby.

"SEC. 7. As used in this Act

"The term 'person' includes any individual, trustee, corporation, partnership. association, firm, or any other combination of individuals.

"The term 'application' includes applications, and any modifications, amend ments, or supplements thereto or continuances thereof.

"SEC. 8. The prohibitions and penalties of this Act shall not apply to any officer or agent of the United States acting within the scope of his authority." Sec. 2. This Act shall take effect thirty days after its approval.]

AN ACT OF CONGRESS APPROVED JUNE 16, 1942 (PunLIC LAW 609, 77th Cos [That section 2 of the Act of Congress approved July 1, 1910 (Public, Nirnbered. 700, Seventy-sixth Congress, third session, eh. 501), be amended to read as follows: "SEC. 2. This Net shall take effect on approval and, together with the provisions of the Act of August 24, 1951 (Public Law 239, Seventy-seventh Congress, trst session, ch. 393), shall remain in force during the time when the United States is at war."]

INVENTION SECRECY ACT OF 1931

INVENTION SECRECY ACT OF 1951

For test of Act see p. 1.

Senate Report No. 1001, Oct. 16, 1951 [To accompany H.R. 4687] House Report No. 1028, Sept. 24, 1951 (To accompany H.R. 4687] The Senate Report repeats in substance the House Report.

Senate Report No. 1001

The Committee on the Judiciary, to which was referred the bill (H.R. 4687) to provide for the withholding of certain patents that might be detrimental to the national security, and for other purposes, having cosidered the same, reports favorably thereon, without amendment; and recommends that the bill do pass.

PURPOSE

The purpose of the proposed legislation is to provide for the withholding of ceriuin patents that might be detrimental to the national security.

STATEMENT

The facts relating to this bill and the justification, thereof appear in House Report No. 1023, Eighty-second Congress, first session, which is .herein set forth.

The present bill is substituted for E.R. 4687. Hearings were held on the present bill on August 21, 1951. H.R. 4637 is largely H.R. 6389. with minor amendments resulting from the suggestions of industry representatives acceptable to the Department of Defense which are intended to make the bill meie equitable, and amendments relating to form. Hearings were also held on H.R. 6389 in the Eighty-irst Congress. In view of further amendments, it is desired to report the bill in its new form. This bill changes the temporary act of Congress now. in force fato permanent law, with several changes recognized as desirable as a result of experience under the temporary law and problems anticipated under a permanent law.

The act of October 6, 1917 (40 Stat. 394. ch. 95; 35 U.S.C. 42) allthorized the Commissioner of Patents to withhold from issue patents or inventions important to the national defense during wartime. On July 1, 1940, Public Law 700 was ens ted to make-ovision of the a of October 6, 1917, effective for years despite t ct that the United States was not at war. This action was decided upon by the Congress because it was apparent that the national interest was endangered by the publication of certain patents. In 1942. Public Law 609 was enacted to keep Public Law 700 in effect during World War II. In 1941, the act was further amended by Public Law 239 to prohibit the filing of foreign patent applications without the license of the Commissioner of Patents and to provide penalties for the viclation of the act.

The temporary 2ct, as amended. remains in force during the time when the United States is at war and will cease to be in effect upon the official termination of the war. The purpose of the proposed bill is to grant the Secretary of Commerce, under certain conditions, the authority to keep inventions secret and to withhold issue of patents when necessary for the national security. According to the Defense Department, it is important to the national defense that the issuance of patents resulting

LEGISLATIVE HISTORY

from research and development sponsored by the armed services and others relating to classified matters be withheld for a period in which tho publication of such matters may jeopardize the national intege„4. The applications in the Patent Office which are presently being withheld from issuance under Public Law 100 will be issued as patents after clic allicial termination of the war unless legislation to prevent this is enacted. Accordingly, the imminence of the declaration by the Congress of the end of the war with Germany and the signing of the Japanese Peace Treaty places this bill in the class of urgent legislation.

An important difference between this bill and Public Law 100 is that this bill sets up two groups of patent applications based upon whether the Government has a property interest in the invention. If the Goverament has a property interest, issuance of a secrecy order requires only a recommendation to the Commissioner of Patents by the head of the. department or agency involved. The phrase "property interest" is intended to include the ownership of all rights in the invention or to a lesser interest therein such as, for example, cases where the foreiga rights are retained by the inventor, or where the Government is entitled only to the interest of one or more joint inventors, and cot to the interest of all the joint inventors. This group will consist in the wain of inventions made by Government employees or Government contractors.. In the other group, the Secretary of Commerce informs the heads of the defense agencies of pateat applications whose disclosure might be detrimental to the national security. This group consists for the most part of inventions made by persons not in contact with the Governmen It is necessary for the Secretary of Commerce to call the attention of the defense agency to the particular application, since they would otherwise have no knowledge of such application. The opinion of the d fense agency concerned is controlling and the order that the invention be kept secret will be made pursuant thereto. The period of secrecy is 1 year, or for the duration of a national emergency declared by the President and 6 months thereafter, or for the duration of hostilities and 1 year following cessation of hostilities. The 1-year period may be renewed or the secrecy classification canceled upon proper retification of the Secretary of Commerce. Under Public Law 100, a secrecy order remains in force until rescinded.

Public Law 700 makes no provision for appeal from the secrecy order.. This bill gives the ower of a patent application placed under secrecy order the right to appeal from the order to the Secretary of Commerce. This amendment is for the protection of persons affected by the secrecy order.

A further amendment to section 1 provides that

"Upon proper showing by the head of the department or agency who caused the secrecy order to be issued that the examination of the appication might jeopardize the national interest, the Secretary of Commerce shall thereupon maintain the application in a sealed condition"

The armed services procurement application provides that they might prohibit the filing of a patent application v t discloses matter whic.. has been classified as secret. Government cractors may thereby be deprived of a property right because they cannot obtain an early filiag date on such patent application. The classification is usually reduced and filing permitted at a much later date. The use of the invention for 1 year or more during this period of filing prohibition may prevent the exercise of the filing privilege. Moreover, this act is effectiv: for compensation purposes only after the filing of an application. li the contractor is not permitted to file, he cannot obtain any benefits under the act. It is believed that the authority to seal the application by the Secre tary of Commerce would reduce the recessity to prohibit the filing of a classified application.

Section 1 also includes the following amendment:

Each individual to whom the application is disclosed shall sia a Jated acknowledgment thereof, which acknowledgment shall be entered in the ile of the application,"

INVENTION SECRECY ACT OF 1951

This is to provide evidence of an examination of the application by other than Patent Ofce personnel. This would establish the dain of examination if the application becomes involved in an interference proceeding with a Government-owned application and it would also establish the person who examined it. In times of chuergency, industry experta enter Government servico for a short period and they may be the mea 25signed to examine such applications. They may be employed as civilians by a competing company. It is important to establish the fact that the had seen the application in the event that a controversy develops later on. Section 2 provides that an invention disclosed in an application subject to a secrecy order shall be held abandoned. if. in violation of the order, such Invention is publicized or disclosed or filed in a foreign country without consent. The effective date of the abandonment is the

date of the violation.

Section 3 differs from Public Law 700 with respect to compensation payable to the owner of an application under a secrecy order like Public Law 700. however, it provides for compensation for damages caused by the order of secrecy for governmental use. Section 3 prescribes a 6-year statute of limitations. It does not require tender of the favention to the Government precedent to recovery of compensation, nor does it defer presentation of a claim for compensation until after a patent issues on the application. It authorizes the head of a department who caused the secrecy order to be issued to make full settlement or, if that cannot be effected, a settlement not exceeding 75 percent of a just compensation. The owner who fails to secure a satisfactory award or who does not apply for compensation may bring suit in the Court of Claims. The 6-yearstatute of limitations is incorporated to preclude the collection of old claims from the Government, and conforms with the statute of limitations on suits in the Court of Claims. Under Public Law 700, no statute of Imitations was provided for the collection of outstanding claims for an unreasonable length of time.

Section 4 prohibits the filing in a foreign country of an application for patent prior to 6 months after filing an application in the United States. unless a license is first obtained from the Secretary of Commerce. This is to prevent fling abroad before the Secretary of Commerce has had an opportunity to examine the application. The 6-month period will also give the departments concerned an opportunity to examine the application. Under Public Law 700, a foreign filing was not permitted unless authorized by the Government.

The provisions of sections 5 and 6 are substantially the same provi sions as section 4. Public Law 700, and section 5, Public Law 239. Section 5 provides that a person who files a foreign. application without license shall not receive a patent and section 6 incorporates penalty provisions into the act..

Section 7 like section 8 of Public Law 233 provides that the prohibitions and penalties of the act shall not apply to offcers or agents of the United States acting within the scope of their ity.

Section 8 authorizes the Atomic Energy Commission, a Secretary of a Defense Department. or the chief officer of any other department designated by the President as a defense agency, and the Secretary of Cɔmmerce to separately issue rules and regulations to administer the act. Section 9 constitutes a saving provision similar to section 6 of Public Law 239.

Section 10 repeals the acts of 1917, 1941, and 1942 but continues the action taken as to secrecy orders in effect on the date of approval of this bill.

Section 11 provides that the Atomic Energy Act of 1946 will not be affected by this act and section 12 sets forth the title of the act.

The necessity for enacting the existing law in permanent form is considered extremely important by the Department of Defense. Moreover, there appears to be general approval of the purpose of the bill. Inventlous useful in war are made and developed during times of peace and