Sre. 10. The Act of Congress approved October 6, 1917 (eh. 95, 40 Stat. 894); July 1, 1940 (ch, 501, 54 Stat. 710): August 21, 1911 (ch. 393, 55 Stat. 657); and June 16, 1912 (ch. 115, 36 Stat, 370) (U.S.C., title 85, sees. 42 and 42a to 420) are repealed, but such repeal shall not affect any rights or liabilities existing on the date of this Act. Any order of secrecy heretofore issued under said repealed Acts, and subsisting on the date of the approval of this Act, shall be considered as an order issued pursuant to this Act and shall continue in force and effect for a period of one year from the effective date of this Act unless sooner rescinded as provided herein. Any claim arising under said repealed Acts and unsettled as of the effective date of this Act, the provisions of any other Act or Acts to the contrary notwithstanding, may be presented and determined pursuant to the provisions of section 3 hereof.

SEC. 11. Nothing in this Act shall be construed to alter, amend, revoke, repeal, or otherwise affect the provisions of the Atomic Energy Act of 1946 (60 Stat. 7551, as amended.

SEC. 12. This Act may be cited as "The Patent Secrecy Act of 1951".

2D CONGRESS, 1ST SESSION

[Committee Print, August 21, 1951]
H.R. 4687

IN THE HOUSE OF REPRESENTATIVES

JULY 3, 1951

Mr. CELLER introduced the following bill; which was referred to the Committer on the Judiciary [Omuit the part struck through and insert the part printed in italic]

A BILL

To provide for the withholding of certain patents that might be detrimental to the national security, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever publication or disclosure by the grant of a patent on an invention in which the Government has a property interest might, in the opinion of the head of the interested Government agency, be detrimental to the rational security, the Secretary of Commerce upon being so notified shall order that such the invention be kept secret and shall withhold the grant of a patent therefor under the conditions set forth hereinafter.

Whenever the publication or disclosure of an invention by the granting of a patent, within categories prescribed by the President and in which the Government does not have a property interest, might, in the opinion of the Secretary of Commerce, he detrimental to the national security, he shall make the application for patent in which such invention is disclosed available for inspection to the Atomic Energy Commission, the Secretary of Defense, and the chief officer of any other department or agency of the Government designated by the President as a defense agency of the United States; and each States. Each individual to whom the application is disclosed shall sign a dated acknowledgement thereof, which acknowledgment shall be entered in the file of the application. If, in the opinion of the Atomic Energy Commission, the Secretary of a Defense Department, or the chief officer of such other another department or agency so designated, the publication or disclosure of such the invention by the granting of a patent therefor would be detrimental to the national security, the Atomic Energy Commission, the Secretary of a Defense Department, or such other chief officer shall notify the Secretary of Commerce in that elleet, and the Secretary of Commerce:~#pan being sù matified, shall order that such the invention be kept secret and shall withhold the grant of a patent thesefør for such period or periods as the national interest requires and upon requires. Upon proper showing by the head of six the department or agener; agency who caused snel the secrecy order to be issed; issued that the examination of the application might jeopardize the national interest, then the Secretary of Commerce shall immediately seal such thereupon maintain the application in à sealed condition. The owner of a patent an application which has been placed under a secrecy order shall have a right to as peal from suck the order to such agency and the Secretary of Commerce under pare called by the President him.

No An invention shall not be ordered kept secret and the grant of a patent withheld for a period of more than one year: Provided; That the year. The Secretary of Commerce shall renew any such the order at the end thereof, or at the end of any renewal period, for additional periods of one year upon notification by the head of the department or the chief officer of the agency who caused the order to be issued that an affirmative determination has been made that the national interest continues so to require, excepting, however, Hint any such require. An order in effect, or issued, during a time when the United States is at war, shall be end remain in effect for the duration of hositilties and a period of one year following cessation of hositilites unless seener specifically rescinded. An order in effect, or issued, during a national emergency declared by the President shall remain in effect for the duration of the national emergency and six months thereefter. The Secretary of Commerce is authorised to may rescind any order upon notification by the heads of all the departments and the chief officers of all the agencies who cause the order to be issued that the publication or disclosure of the invention is no longer deemed t↔ be detrimental to the national security.

SEC. 2. The invention disclosed in an application for patent subject to an order made pursuant to section 1 hereof may be held abandoned upon its being established before or by the Secretary of Commerce that in violation of said order said the invention has been published or disclosed or that an application for a patent therefor has been filed in a foreign country by the inventor, his successors, assigns, or legal represenatiatives, or anyone in privity with him or them, without the consent or approval of the Secretary of Eommerer, and any such Commerce. The abandonment shall be held to have occurred as of the time of such vinlation: Provided; That in no case shall the violation. The consent or approval of the Secretary of Commerce shall not be given without the concurrence of the heads of the departments and the chief officers of all the agencies who caused the order to be issued. Any such 4 holding of abandonment shall constitute forfeiture by the applicant, his successors, assigns, or legal representatives, or anyone in privity with him or them, of all claims against the United States based upon such invention.

"SEC. 3. Any An applicant, his successors, assigns, or legal representatives, whose patent is withheld as herein provided, shall, if the order of the Secretary of Commerce above referred to shall have been faithfully obeyed have the right, during a period beginning at the date the applicant is notified that, except for such order, his application is otherwise in condition for allowance, or beginning at the effective date of this Act, whichever is later, and ending two years after the date a patent is issued on eh appliestion thereon, to apply to the head of any department or agency who caused the order to be issued for compensation for the damage neeruing caused by renson of the order of secrecy and/or for the se Ks, use of the invention by the Government, if the Government's the resulted from the applicant's disclosure; much resulting from his disclosure. The right to compensation for use to shall begin from on the date of the first use of the invention by the Government. The head of my the department or agency who exped the order to be issued is authorized, if any such claim is presented within the perinds above specified upon the presentation of a claim, to enter into an agreement with said the applicant, his successors, assigns, or legal representatives, in full settlement and compromise for such the damage and/or e, if any, and muy much use this settlement agreement entered into shall be final and conclusive for all purposes, notwithstanding any other provision of law to the contrary. If full compromise and settlement of any such the claim cannot be effected, the head of any the department or agency who enused the order to be issued, my, in his discretion, naministentively may award and pay to such applicant, his successors, assigns, or legal representatives, a sum not exceeding 75 per centum of the maximum sum; if any, sum which in the opinion of the head of such the department or agency would constitute fair and considers just compensation for sch the damage and/or me, if any use. Within two years after issuance of a patent, eny a claimant whe fails to secure an award satisfactory to bitu shall have the right to may bring suit against the United States in the Court of Claims for seh an amount which, when added to such #word; if any, the award shall constitute fair and just compensation for the damage and/or use; if any; use of the invention by the Government. The owner of any patent issued upon an application that was subject to a secrecy order issued pursuant to section 1 hereof, and whe faithfully obeyed the order, who did not apply for compensation as above provided, shall have the right, within two years after the date of issuance of such patent, to bring suit in the Court of Claims for fair and just compensation for the damage weerning to him caused by reason of the order of secrecy and or use

by the Government of the patented invention resulting from his disclosure, shek the right to compensation for use; provided such use resulted from the applicant's discientes da use shail begin at the first date of euch use on the date of the first use of the invention by the Government. In any a suit under the provisions of this section, and in my negotiations concerning settlement and compromise of any such a claim, the United States may avail itself of any and all defenses that it may be plended by it plead in an action under title 28, United States Code, section 1498, as amended. This section shall not confer a right of action on anyone or his successor ... assignee assigns or legal representatives who, when he makes sel a claim, is in the employment or service of the United States, or who, while in the employment or service of the United States, discovered, invented, or developed the invention on which such the claim is based.

Sue. A. So Ercept when authorized by a license obtained from the Secretary of Commerce a person shali aol fiig or cause or authorize to be filed in any foreign country prior to winciy days after filing in the United States an application for patent or for the registration of a utility model, industrial design, or model in respect of any an invention made in the Finited Situles prior to ninety days níter fling in the fnited States an application covering meh invention except when authorized in ench one by a license obtained from the Secretary of Commerce under such rules and regtilntions as he shall prescribe: Provided; Pimt no such this country. A license shall not be granted with respect to any an invention which is the subject mistier of a subsisting to an order issued by the Secretary of Commerce pursuant to section 1 hereof without the concurrence of the heads head of all the departments ↔ and the chief officers of all the agencies who caused the order to be issued. Stel The license may be granted retroactively in case of Inadvertance exept in Hæ ense of inventions falling where an application has been inadverently filed abroad and the application does not disclose an invention within the categories of invencion prescribed under section 1 hereof.

The term "application" when used in this Act include includes applications, and any medifications, atpendments, or supplements thereto, or divisions thereof. SEC. 5. Notwithstanding the any other provisions of sections ISS6 andd 4887 of the Revised Statute: (85 tff: mm 24 and 324: law any person, and the his successors, assigns, or legal representatives of any such person, shall be deImpted from Freeiving not receive a United States patent for an invention if such that person, or suck his successors, assigns, or legal representatives shall, without procuring the authorization license prescribed in section 4 hereof, have made, or consented to or assisted another's making, application in a foreign country for a patent or for the registration of a utility model, industrial design, or model in respect of such invention where mutlurization for such application is required by the prostions of section 4 hereof; and any such the invention. A United States patent netomily issued to any such person, his successors, assigns, or legal representatives so debarred or becoming debarred shall be invalid.

Sec. 6. Whoever, during the period or periods of time an invention has been ordered to be kept secret and the grant of a patent thereon withheld pursuant to section 1 hereof, shall, with knowledge of such order and without due authorization, willfully publish or disclose or authorize or cause to be published or disclosed stels the invention, or any material information with respect thereto, or whoever, in violation of the provisions of section 4 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.

Sce. 7. The prohibitions and perialities of this Act shall not apply to any officer or agent of the United States acting within the scope of his authority, nor to any person acting upon the his written instructions of, or in reliance on the written jermission or advice of mus steht eiliser de agent or permission.

Sue. S. The AMomie Energy Commission, the Secretary of a Defense Department, the chief officer of any other department or agency of the Government designated by the President as a defense agency of the United States, and the Serretary of Commerce, may separately issue steh rules and regulations as may be sent and proper to enable the respective department or agency to carry out the provisions of this Aet Aet, and in médition are muthorized, under sttelt rules and regulation is ench muy peseribes to delegate mud provide for tie redelegation wishin tinir respective departments or agencies of any power or authority conferred by this. Net to such responsible oflicem; bourds; usents, or persone my ench may dismale or uppoint

SEC. 9. If any provision of this Act or of any section hereof or the applientinn of such provision to any pemon or eireunestänee shall be held invalid, the remainder of the Act and of such section and application of such provision to perons or cireunestanem other than these as to which it is held invalid shall not be affected thereby.

SEC. 10. The Acts of Congress approved October 6, 1917 (ch 95, 40 Stat. 394); July 1, 1940 (ch. 501, 54 Stat. 710); August 21, 1941 (ch. 393, 55 Stat. 657); and June 16, 1942 (ch. 415, 56 Stat. 370) (U.S.C. title 35, secs. 42 and 42a to 42f) are repealed, but such repeal shall not affect any rights or liabilities existing on the date of this Act. Any An order of secrecy heretofore issued under said the repealed Acts, and subsisting in effect on the date of the approval of this Act, shall be considered → an order issued pursuant to this Act and shall continue in force muud effect for a period of one year from the effective date of this Aet unles sooner rescinded us provided herein: day A claim arising under said the repealed Acts and unsettled as of the effective date of this Act, the provisions of any other Act of Acts to the contrary notwithstanding, may be presented and determined pursuant to the provisions of section 2 hereof this Acl

SEC. 11. Nothing in this Act shall be construed to alter, amend, revoke, repeal, or otherwise affect the provisions of the Atomic Energy Act of 1946 (60 Stat 755), as amended.

Sec. 12. This Act may be cited as “The Patent Invention Sccrecy Act of 1951". Mr. BRYSON. Gentlemen, the hour has arrived to begin the hearing. According to this list, Dr. M. O. Hayes, Patent Counsel, Office of Naval Research, Department of Defense, is the first witness. Dr. Hayes, will you come around?

Dr. HAYES. Yes, sir.

STATEMENT OF DR. M. 0. HAYES, PATENT COUNSEL, OFFICE OF
NAVAL RESEARCH, DEPARTMENT OF DEFENSE

Mr. BRYSON. Do you have a prepared statement, Doctor?
Dr. HAYES. No, sir; I did not prepare a statement.

I thought that the matter was pretty well crystallized and that it would be sufficient to appear here and indicate the interest of the Navy Department, the urgent interest of the Navy Department, in the enactment of this bill.

As you know, we have been trying since about 1946 to get some such legislation as this passed, and in view of the possible termination of the war with Germany and a treaty of peace with Japan, it is of the utmost importance that the inventions disclosed in patent applications should be given the protection afforded by the legislation proposed in this bill.

Mr. BRYSON. Now, Doctor, you have in your hand a copy of the committee print?

Dr. HAYES. Yes, sir; I have.

Mr. Brysox. And you are addressing your present remarks to this copy?

Dr. HAYES, Yes, sir.

Mr. BRYSON. In its present form?

Dr. HAYES, Yes, sir.

There is only one point that I would like to bring to the attention of the committee.

I was chairman of the Navy Section of the Army and Navy Patent Advisory Board from the beginning of its operation under Public Law 700 up until 1946. So that, I went through all of the growth pains of that committee, the formulation of policy and procedure, and so forth.

PATENT DISCLOSURE

Now, this bill proposes that a secrecy order shall be effective for a Vear. Now, that is in time of peace, of course. The subsequent provisions of the bill relating to national emergency and war make my remarks apply only to the operation of the act in time of peace.

Mr. Willas. Let me see if I understand the meaning of the effectiveness of the secrecy order for a year. As I understand the bill, the purpose of it is really to seal the application for a year during peace with the right, however, on the part of the Government agencies to reevaluate the patent and to again impose another order for an additional year, is not that right? In other words, the effectiveness of the order does not automatically expire in a year?

Dr. Hayes, Well, I read now from line 13, page 3 of the committee print.

An invention shall not be ordered kept secret and the grant of a patent withheld for a period of more than 1 year.

You see it is mandatory. The secrecy order must expire at the end of the year.

Mr. Willis. Yes, but go on and read further now.

Dr. HAYES (continues reading).

The Sceretary of Conaneree shall renew the order at the end thereof, or at the end of any renewal period, for additional periods of 1 year upon notification by the head of the department or the chief officer of the agency who caused the order to be issued that an affirmative determination has been made that the nafional interest comtimes so to require.

Mr. Willis, Now, is not the important wording there, "continues so to require"? In other words, it is to authorize the agency to lift the secret order or to continue it.

Dr. Hayes. That points out that it requires an act of the agencies to make that affirmative determination at the end of each year. We tried that when we started on the Army and Navy Patent Advisory Board. We said we are going to review these so that we do not keep these under a secret order any longer than a year. We found that it was impossible with the staff that we had. We could not review them. We did not have staff enough to get the applications examined in the first place for the issuance of a secrecy order, and it is going to mean, necessarily, an increase in the staff available to the defense departments for reexamining these cases each year. You see, if you have 3,000 cases under secrecy orders that means you have to examine 250 of those cases a month, which is an average of 10 a day if you call 25 working days a working month, and it was our experience that it was extremely dif ficult for the engineers and technical men who had to examine these applications in the first place to decide whether a secrecy order should by issued as they were overloaded with their engineering and technical duties in the bureaus.

Mr. Winnas. Well, what would be your thought of the thing that should be done to cure that?

Dr. Hayes. The only thing I know is simply to strike out that provision that they have to be renewed at the end of the year.

Mr. Wittis. Then we will be faced with two or three problems. First, nobody likes to report a bill, I know I do not, that will require more employees. On the other hand, certainly we must have some kind of protective features in peacetime not to freeze patents forever. Lonw what the answer is. Maybe the answer is that the