Mr. INGRAM. Yes, Mr. Chairman, one area I would like to focus on. That involves carbon fiber technology, which-it strikes mepresents the balance that ASPAB is faced with most directly, an item which has both military and civilian applications.

Briefly, as I understand it, the carbon fiber technology involves a lightweight, high shrink material which can replace steel or aluminium. It can be used in aerospace, sporting goods, automotive, industrial aplications, but has a very serious drawback; that is, that when it is subjected to heat in a fire, it breaks down.

Polyurethane will drop out, and you are left with these carbon fibers which have a high electrical conductivity, and then they pose a hazard to electrical equipment.

As I recall, there was at least one instance where a plane had crashed, which was composed of this material, and may or may not have knocked out some communications at an airport as a result of the crash.

There is also some concern that this material, when it breaks down in a fire, might pose a hazard to computer equipment.

Are you aware or could you sketch out for us the Department of Defense's involvement with a review of carbon fiber technology and whether any current secrecy orders are outstanding in this area? Mr. SCIASCIA. Could I confer with my colleagues for a moment? Mr. INGRAM. Sure.

Mr. SCIASCIA. None of the members of this board know anything about this type of situation that you are referring to as carbon fibers. As to answering your question, do we have any under secrecy orders, what I would like to do is be permitted to send you a written response later on, after reviewing our orders.

At this point in time we have no recollection of any area in carbon fibers that would involve secrecy orders, or of any great import that would require any secrecy orders, but I would like to send to you a written response to that matter.

Mr. INGRAM. But in your collective memory this was not an issue presented before ASPAB?

Mr. SCIASCIA. Never to my knowledge.

Mr. INGRAM. I find it curious because there has been an ongoing review involving Public Health Service, NIOSH, OSHA, EPA, DOT, Commerce, NAŠA, and I am informed parts of the Defense Department and CIA on this issue for at least 2 years.

Frank Press' office had gotten involved and the Bureau of National Standards had gotten involved and, as I say, it is an area that has incredible commercial value, but there is the military hazard that I mentioned earlier. It strikes me as curious that ASPAB has not played a role in that area.

Mr. SCIASCIA. To my knowledge, we haven't. As a selected area, it may have fallen somewhere for review, but I would have to look into our records on that.

Mr. INGRAM. Thank you.

[The information follows:]

There have been no requests from the Department of Defense to classify patent applications surrounding carbon fiber technology. In fact, most carbon fiber production technology is proprietary in nature rather than patent disclosed.

Mr. STURGES. Mr. Sciascia, with respect to answers to a number of questions, does your answer on the Central Intelligence Agency

mean that the CIA is an agency under the act for purposes of requesting secrecy orders on its own applications, but not a defense agency?

Mr. SCIASCIA. That is right.

Mr. STURGES. Such that it could not request a secrecy order on someone else's application?

Mr. SCIASCIA. That is right.

Mr. STURGES. Given that, I ask you or Colonel Hougen why, then, the practice for the CIA when it files its own patent application is to defer to ASPAB for secrecy order purposes, where its application was classified?

Mr. SCIASCIA. I will let Colonel Hougen answer that because his office processes all those cases.

Colonel HOUGEN. The very simple answer is that the CIA has no patent attorneys and they don't quite understand what a patent application is. They are prepared for them by the contractors now.

For many years in the past our office prepared patent applications for them based on information they gave us. We duly acted as patent attorney, patent counsel for them. As a matter of custom, we have continued to so act.

Mr. STURGES. In connection with the CIA, there was discussion at the ASPAB meeting-and I notice it predates you slightly-in September 1948, not very detailed, which indicated the CIA was undertaking certain activities with respect to invention secrecy.

The board thought it would see whether those CIA activities could be coordinated with its own activities. This occurred at the same meeting at which ASPAB changed its name from Army and Navy Patent Advisory Board.

Have you any historical knowledge or guess as to what those activities were?

Mr. SCIASCIA. Not I.

Colonel HOUGEN. Nor I.

Mr. NIEMAN. Nor I.

Mr. STURGES. With respect to question No. 4, you have indicated that an explanation of the so-called 5-year rule appears to be lost in antiquity. We have asked the Patent Office whether it can determine what that rule was and what followed from it.

Given the strike-out on that one, please tell us about the 3-year rule, which is the statutory authority that has been around since the 19th century. What do you do with it? Why do you need it? Mr. SCIASCIA. The 3-year rule is derived from 35 U.S.C. 267, and that provision provides that a patent application must be owned by the Government, and also the invention must be such that it is important to the armament and defense of the Nation, and it does provide for the agency to delay taking 3 years instead of the statutory 6 months to respond to a Patent Office action.

To clarify it, let us say the Navy files a patent application. The Patent Office examines it, sends us out what is called a Patent Office action, and then normally according to statutory requirements you have 6 months to respond to it but the U.S.C. 267 indicates that the Government can take up to 3 years for responding to it.

Now, I don't know the legislative history to that, but as far as the use of it-and here again I am speaking on behalf of Navy-we

use it, but in very rare situations, and usually it is used in those instances where we have received a Patent Office action, which has rejected claims, and sometimes there are objections to the subject matter of the application as being incomplete.

The information for us to be able to respond in a timely manner to that Patent Office action within the 6 months cannot be done because of additional information we may have to require, tests that may have to be conducted, or the inventor is not available to us at that time, so we request that it be placed under the 3-year rule to give us more time.

Now, this does not necessarily mean that we use all of the 3 years. Many times we will file a response within maybe 8, 10, or 12 months, but here again this is used on the average at least in Navy in about two or three cases a year, if that many.

Mr. STURGES. How about the Army and Air Force?

Colonel HOUGEN. In the 5 years that I have been in our office, the sole delegee of the Secretary of the Army authorized to put a case under the 3-year rule has not put any cases under; so for 5 years it has been zero. I would assume that is probably true for some years before that.

The Korean war is probably the last time the Army really was involved. In time of war, patent prosecution gets a very low priority.

Mr. SINGER. I have had responsiblity for the patent prosecution effort of the Air Force since 1973, and I am not aware that we have used that statute.

Mr. STURGES. The code section covers applications which are owned by the Government. That also, though, embraces the situation in which the application is assigned to the Government, isn't that correct?

Mr. SCIASCIA. Right.

Mr. STURGES. A closing question now. There are about 3,500 new and renewed secrecy orders in existence right now, which appears to be the lowest number since the summer of 1951. You also note in your testimony that the rate of rescission of secrecy orders may be climbing. At least more than 400 were rescinded last year. Can you foresee a downward trend in the use of secrecy orders, and what relation is there, if any, to the fact that the uniformed services are now having to review 6,000 or more applications and current secrecy cases per year?

Mr. SCIASCIA. With respect to your first question, do we see a downward trend, with the advent of the National Emergency Act. This meant that applications which had been under secrecy orders and not reviewed for a substantial period of time now require annual review in order to comply with the statutory requirements.

In other words, there has to be a request to renew the secrecy orders, and failure to request the Commissioner of Patents and Trademark Office to renew it means that the secrecy order is automatically rescinded. So, therefore, it is incumbent upon the agencies to conduct this review.

We have an initial downward trend now because all of these cases have been on file for a substantial period of time without this annual review requirement. Now, because of the annual review requirement, many of these cases are falling by the wayside.

Whether this will continue this way still remains to be seen. It is not certain, but the indication is that this is the way it will be, that there will be a downward trend on it.

Mr. STURGES. A leading question. Is this a function really of the workload, of the fact that technical people have to look at so many existing orders per year, or is it truly the result of a new determination that the order is no longer needed?

Mr. SCIASCIA. It is the result of a new determination.

Colonel HOUGEN. Excuse me. I would like to add one thing. The trend has continued since before the National Emergency Act. At least since 1975 there has been a fairly constant downward trend, and that predates the National Emergency Act. We were reviewing cases on an annual or other basis before the National Emergency Act.

Mr. STURGES. In a related matter, the ASPAB and the Patent Office a year and a half ago had some discussions about possible legislation to amend the Invention Secrecy Act.

Was one of the things you had in mind extending the initial or renewal period of secrecy orders?

Mr. SCIASCIA. No. What we were concerned with, and which I have made part of my testimony here, is the 6-month period required for the defense agency to have a secrecy order imposed on a patent application.

The reason why we were concerned about this is that we were receiving a substantial number of patent applications for review from the Patent Office which were more than 6 months old when we received them, so therefore the defense agencies did not have enough time to have a secrecy order placed on it.

Also, you have to consider that these applications have to be routed to cognizant security personnel, and this includes a period of time, but that was our major difference with the Patent Office at that period of time.

Of course, they have indicated to us that they are trying to improve their performance. As a matter of fact, as I understand it, they are in the process of trying to computerize this and, therefore, reduce the period of time between the time they receive the patent application and give it to the military departments.

By the way, you attended our last meeting. I had admonished the Patent Office representative there about the great number of cases that were more than 6 months old when they had referred them to

us.

Mr. STURGES. Was one of your proposed legislative cures an extension of that 6-month period?

Mr. SCIASCIA. It was elimination of the 6 months, but of course we had other provisions in there, where we reduced the area for consideration of requiring a license from the Commissioner of Patents to file patent applications in foreign countries. It was reduced down. Now here I am trying to recall from memory.

In munitions, the international traffic in arms list. That is about it on what I can recall. We have reduced the area for consideration.

Mr. STURGES. Thank you, Mr. Chairman.

Mr. INGRAM. I have just one last question.

When we began this review 8 months ago, I couldn't understand why there hadn't been any litigation attacking the constitutionality or portions of the Inventions Secrecy Act. Frankly, I still can't. Do you have any views as to why there have been no lawsuits in this area?

Colonel HOUGEN. One thing. Most of the secrecy orders that have been imposed have been imposed on the kinds of inventions that could be sold to the Government for missiles, for bombs, for tanks, whatever may be the case.

So, the existence of a secrecy order doesn't work much hardship upon that kind of inventor. He can still peddle his invention. What the inventor wants to do is make money, and he is very happy as long as we buy our equipment from him or his company. So, it has been a quiescent area.

We are now in the throes of more litigation, as the information I gave you some months ago indicated. We have six cases that have recently been in the courts involving various aspects of the Invention Secrecy Act.

The constitutionality has not been raised in any of them, I think, probably because the act goes back so far in history. If we have had something for 60 or 70 years, people feel a little bit odd about raising constitutional issues, but it may be raised.

Mr. INGRAM. I think you explained to us in the staff interview, the_military-industrial complex and how to play the game, and perhaps that does explain it.

Let me, if I might, try out a theory on you; that is, that perhaps it is to the advantage of the contractor to use the secrecy invention route process to extend the time over which the company is able to control the invention.

The patent period does not start to run until after the secrecy order is dropped, so that the contractor would be able to extend his control over an invention much beyond the statutory period for the patent application, and that it might be to the advantage then of the contractor to pull out of the sky derivative classification on the patent application, apply it to the application, and then what normally seems to happen, the application, once it comes in classified, stays in that way. It is usually not challenged, as far as I can see. This, then, would allow, as I say, the contractor to keep control of that invention for much longer than a private individual would coming in without the ability to classify the item.

Colonel HOUGEN. That might happen in our country. In the United Kingdom, for example, it would not happen, because there a patent lasts for 20 years from filing. Our system gives 17 years from date of issuance. But one thing that might affect that greatly, if we are talking about the sort of invention where the Federal Government is a primary customer because it deals with armaments, the Government has a license in the invention by virtue of the R. & D. investment in the contract. These are property-interest cases. Having that Government license, the contractor really does not have any kind of a lockout against his competitors. For example, when a Government contractor owns patent rights in a given invention, if we contributed to the R. & D. cost, we have a license so that we can go ahead to his competitors, both while it is under