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secrecy order and afterwards, so he may have lost any effective market there except what he gets by being first in the door.

Mr. INGRAM. But as you suggest, it might still be an incentive.
Thank you.
Mr. PREYER. Thank you.
Mr. Morr.

Mr. MORR. Thank you, Mr. Chairman. I have several questions. First, I want to be clear on the role of ASPAB in the category list development process. As I understand it, and correct me if I am wrong, the various members of ASPAB submit their list to ASPAB. It is automatically sent on to the Patent Office. There is really no normal approval of the category list by ASPAB's board. Is that correct?

Mr. SCIASCIA. As far as I know, that is correct.

Mr. MORR. Second, in the process of defense agency review-this may be a question more appropriately directed to the Patent Office, but you may know the answer-of a patent application, what happens if an inventor files an amendment to his initial application? Is that amendment also reviewed by the agencies?

Mr. SCIASCIA. No; not ordinarily. The way it operates is if the application has been reviewed initially, and no secrecy order is placed on it, then that application will never be seen again as far as the military departments are concerned.

Mr. MORR. Šo it is possible for an inventor to include information that might be subject to a secrecy order by means of amendment; is that correct?

Mr. SCIASCIA. At a subsequent date, yes.

Mr. MORR. What about the reverse? What if an inventor has filed an application and, to use the example you mentioned in your testimony, he has referred to some larger weapons system or something in a way that the application is classified and secrecy order might issue? His amendment then might delete that reference so that he would have an invention that might be patentable outside of the secrecy order process. Is that then reviewed?

Mr. SCIASCIA. What you are referring to is that when you do amend a patent application to delete certain portions of it, the deletion is done by placing a red line through it. However, that deleted portion still remains part of the original file, so the mere cancellation by an amendment does not mean that this has now become declassified information.

Mr. MORR. So he has to abandon and refile; is that correct?
Mr. MORR. Is that the process?

Mr. SCIASCIA. You mean if he wants to file an application without that information?

Mr. MORR. That is correct.

Mr. SCIASCIA. He does not have to abandon it. He can file a continuation of it.

Mr. MORR. Are there unpatentable applications that are under secrecy order?

Mr. SCIASCIA. You mean by unpatentable applications that an application has been filed initially, a secrecy order has been imposed on it, and the prosecution of the patent application continues

normal, and upon conclusion of actions by the Patent Office, it

is determined there is no patentable subject matter, and all claims are rejected, final rejection. That will still remain under secrecy order. It had a secrecy order on it initially, and will remain that way until it is reviewed on an annual basis and it is determined that it is no longer classified. So the response to your question is that an unpatentable patent application can remain under secrecy order.

Mr. MORR. Is it possible that an application would contain information that would need to be continued under secrecy order even though it is unpatentable beyond the period of review? You are saying that it is reviewed, the secrecy order is going to be reviewed?

Mr. SCIASCIA. That is right.
Mr. MORR. On an annual basis.
Mr. SCIASCIA. The application is reviewed on an annual basis.

Mr. MORR. The subject matter of the application is not patentable, but the application contains information which may be classified.

Mr. SCIASCIA. Right.
Mr. MORR. Can a secrecy order remain?
Mr. SCIASCIA. Yes, it does.

Mr. MORR. And I assume the basis for that is the classification executive order; is that correct?

Mr. SCIASCIA. It is still classified information.

Mr. MORR. So it would remain in effect until the executive order or until the information was declassified?

Mr. SCIASCIA. Until the reviewer determined that the information contained in it is no longer classified.

Mr. MORR. Your testimony indicates that inventors may seek a modification of the secrecy order, and my question goes to the little guy. Are private inventors given notice of the fact that they can seek modification, and how often do they do so?

Mr. SCIASCIA. As to how often they do so, here we are talking about private individuals.

Mr. MORR. I am talking about what you referred to as the John Doe.

Mr. SCIASCIA. As the John Doe case. I believe our experience indicates that there are very few of those requesting modifications of the secrecy order. Generally you will find that it is a corporation who has been a Government contractor that requests modification of the secrecy order.

Mr. MORR. Is there anything that would give a John Doe notice that he can request that?

Mr. SCIASCIA. I am pretty sure that the secrecy order notice from the Patent Office will contain information that he may request modification, but I would have to see the form. It says, "Similarly, you may petition for a permit to disclose or modify the secrecy order stating fully the reason or the purpose for disclosure modification.

Mr. MORR. One last question. Are there any deadlines for an agency to respond to a request for modification? Colonel HOUGEN. I do not think there are any.

Mr. SCIASCIA. There is no deadline that I know of, but I do know that they are acted on promptly.

Mr. MORR. Thank you.
Thank you, Mr. Chairman.
Mr. PREYER. Mr. Butler.
Mr. BUTLER. Thank you.

Gentlemen, the Patent Office has not gotten really good press lately. There was an article in the Washington Post of the extensive problems there. The Wall Street Journal also had one recently. Yesterday the Judiciary Committee adopted an amendment to the patent legislation which if it becomes law would make it an independent agency, part of the blame being the stepchild status it has as part of the Department of Commerce. I wonder if you gentlemen would like to comment on the relationship of that move to the problems you may or may not be having with the Patent Office, and whether you would recommend it or not.

Mr. SCIASCIA. Insofar as it having any impact on our operation, I could not imagine that there would be too much of a difference. It is a matter of getting the administrative workload organized, and being an independent agency or not would be a matter I would say for the Commissioner of Patents and Trademarks to be able to say whether he is better off. I do not see how it would affect our interrelationship with the Patent Office.

Mr. BUTLER. Would you have some suggestion as to what might be done to improve the Patent Office, the operation?

Mr. SCIASCIA. I believe that there are better-qualified people in the Patent Office than I, who are more familiar with all of their problems than I, than for me to make any suggestions.

Mr. BUTLER. I yield back, Mr. Chairman.

Mr. PREYER. Thank you very much, gentlemen. We appreciate your testimony, Mr. Sciascia, and that of your associates. I think it has been very straightforward and very helpful to the committee. We appreciate your being with us today.

Mr. SCIASCIA. I thank you for the opportunity to be here.

Mr. PREYER. Our final witnesses today are from the Department of Energy. Mr. Duane Sewell, who is the Assistant Secretary for Defense programs, is accompanied by Mr. Eric Fygi -

Mr. SEWELL. There is a substitution for Mr. Fygi.
Mr. PREYER. Perhaps I had better let you present your associates.

Mr. Sewell, according to our custom here, we ask our witnesses to be sworn when we are dealing with factfinding. I will ask you to stand.

Do you solemnly swear the testimony you will give before this subcommittee will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. SEWELL. I do.
Mr. DUFF. I do.

Mr. PREYER. Thank you, gentlemen. I understand you have with you Mr. Leon Silverstrom, the Assistant General Counsel.

Mr. SEWELL. That is correct.

Mr. PREYER. And Mr. Robert Duff, Director of the Office of Classification.


Mr. SEWELL. Mr. Duff is on my left; Mr. Silverstrom on my right.

Mr. Chairman, members of the committee, I appreciate the opportunity to appear before you again today. This subcommittee has been studying the issue of the Government's authority to classify, restrict, or assert ownership rights over privately generated data. Under the Atomic Energy Act, the Department of Energy is charged with the task of protecting a special category of nuclear information known as Restricted Data. The Congress originally assigned this responsibility to the Atomic Energy Commission. The responsibility was later transferred to the Energy Research and Development Administration and then to the Department of Energy. The primary concern at the time the act was written was the prevention of nuclear weapon proliferation. The reason for that concern has been demonstrated and indeed broadened to include the need to prevent the dissemination of this type of information to terrorists. At the same time, that part of the act which encourages declassification and dissemination of scientific and technical information has also proven to be more and more valid as we seek a solution to overcome the energy crisis. This dual mandate which is designed to protect the common defense and security and at the same time promote scientific progress involves some very complex issues.

As a continuation of our discussions at the hearing on March 20, I would like to take this opportunity to briefly review the Department's procedures for classification and declassification of restricted data which have evolved over the past 34 years.

Under section 142 of the Atomic Energy Act, the DOE is required to maintain a continuous review of restricted data. The purpose of the review is to establish what information must remain classified and what may be declassified without undue risk to the common defense and security. Over the years, the DOE and its predecessor agencies have developed a structured system of classification guides. These guides provide specific detailed topics covering the classified areas under the Department's jurisdiction. They are used by authorized individuals in determining the proper classification markings to be placed on individual documents.

As the Assistant Secretary for Defense programs in the Department of Energy, I approve basic DOE policy on the classification and declassification of restricted data, and I have been assigned the authority within the DOE for the declassification of restricted data in accordance with the Atomic Energy Act.

In this process, a number of factors may be considered in any decision to change classification policy. These include: The published state of the art in nuclear science and technology; the value of the information to U.S. programs; unauthorized release of classified information; and the effect the information might have on the proliferation of nuclear weapons capability in other nations. These and other factors are weighed and a balanced judgment is made to

determine whether declassification of the information would constitute an undue risk to the common defense and security.

Any decision to change classification policy is preceded by a thorough review of the pertinent issues at DOE headquarters, DOE field organizations, and other Gvernment agencies, as appropriate. This review activity is managed by a professional staff in my Office of Classification at DOE headquarters. They are experienced in the technology of nuclear programs as well as the procedures for classification and declassification of information. Such staff activities frequently involve detailed meetings with pertinent DOE program and contractor personnel and other affected individuals and agencies. Numerous drafts are issued for comment and at times onsite visits are made to particular facilities to examine issues more closely.

Recommendations for classification policy are then presented to me by the Director of Classification, outlining the issues at hand, along with all pertinent background and coordination information. If I approve the recommended policy changes, then the Director of Classification is responsible for implementing them either through a change notice to an existing guide, or the generation of a new classification guide. These guides are then issued to appropriate heads of DOE organizations and other individual agencies as necessary for their information and for their use in making decisions related to specific documents.

In the case of the publication of the Morland article, the Government was faced with the unavoidable problem of having authenticated it in a general way by our very efforts to prevent its publication. Unfortunately, the injunction was made moot by publication of the Hansen letter to Senator Percy in the Madison Press Connection. As a result of these publications, and in view of their wide dissemination, I took action on December 27, 1979, to declassify certain information compromised in the articles so the court could properly review and evaluate the in-camera material involved in the Progressive case. Since that time, in accordance with longstanding procedures, the Department has been reexamining and drafting revised classification policy and guidance to implement the declassification action. However, these revisions to classification guidance have not yet been issued, since the Progre has not yet been resolved. In light of the pending litigation, it would not be appropriate for me to comment further on this case at this time.

I would now like to respond to your request for information on two specific items: One, the no-fund contract between the Atomic Energy Commission and KMS Industries, Inc., and two, the Classification and Security Agreement between the Energy Research and Development Administration and Jersey Nuclear-Avco Isotopes, Inc. (JNAI).

The KMS contract emanated from a KMS proposal in 1970 that it be authorized to pursue research and development in laser fusion at the company's own expense. The proposal involved technology which had classified nuclear weapons applications as well as prospects for unclassified energy applications. The Commission was, therefore, faced with deciding whether it should attempt to preclude any private interests from pursuing work in this field.

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