On February 1 Curtis A. Nelson became the director of the Division. of Inspection established in September 1954 (Seventeenth Semiannual Report, July-December 1954, pp. xiii, 58). A small staff was organized to carry out the functions assigned to the division in accordance with the provisions of Section 25 c of the Atomic Energy Act of 1954. This section provides in part that the division "shall be responsible for gathering information to show whether or not the contractors, licensees, and officers and employees of the Commission are complying with the provisions of this Act (except those provisions for which the FBI is responsible) and the appropriate rules and regulations of the Commission."

The director has three assistant directors: an Assistant Director for Management Appraisal to ascertain that management appraisals of the Commission's programs are developed and carried out by the staff and program divisions and that these appraisals are adequate in the areas they cover and do not involve any unnecessary duplication of activity; an Assistant Director for Compliance to inspect directly licensees for compliance with all license requirements; and an Assistant Director for Investigations to investigate directly all questions of employees' conduct, fraud, etc., in AEC and contractor organizations. In addition, when directed by the General Manager, the division will inquire into and report upon any other matters that are under the General Manager's authority.

Inspection Activities

During the first 6 months of 1955 studies were undertaken of existing inspection type activities by program and staff divisions. A preliminary inspection of some components of the Raleigh Research Reactor at North Carolina State College was conducted. Additional inspections of reactors at Oak Ridge-including the graphite reactor, the Low Intensity Test Reactor, the Tower Shielding Facility, and the Bulk Shielding Facility-and inspections of the General Electric Aircraft Nuclear Propulsion critical facility at Evendale, Ohio, and the Pennsylvania State Reactor at Pennsylvania State University were also scheduled.

The authorization and inspection program of the Isotopes Division, Oak Ridge Operations Office, was studied and a plan of inspection developed under the new licensing program-subject to further review as additional licensing experience is gained.

Patents

The Commission has approximately 775 patents available for licensing on a nonexclusive, royalty-free basis. It has issued approximately 481 such licenses under these patents.

The first patent issued to the Commission on a complete nuclear chain reactor was issued (after declassification) as patent No. 2,708,656 on May 17, 1955, by the U. S. Patent Office. The patent covers the inventions of Drs. Enrico Fermi and Leo Szilard on thermal neutron reactors. It includes the uranium-graphite moderated reactor constructed at the University of Chicago in 1942 in which the first controlled nuclear chain reaction was achieved.

During the past 6 months a considerable number of patents were issued on the electromagnetic method of separating isotopes. Included in this group is a patent on the overall electromagnetic method (the Calutron) developed by Dr. E. O. Lawrence-issued as patent No. 2,709,222 on May 24, 1955, and owned by the AEC.

After notice published in the Federal Register, the Commission amended its regulations establishing general rules of procedure in considering applications for reasonable royalty fees, just compensation and awards under the patent provisions of the Atomic Energy Act of 1954. The principal changes include a delegation of authority to the Patent Compensation Board to determine applications for just compensation under Section 173 of the Atomic Energy Act of 1954. There is also provision for the submission of interrogatories to any party to a proceeding before the board for the purpose of

placing on record facts which the board deems relevant to its consideration of a patent application.

The Commission settled for $400,000 the application for an award made by Drs. Glenn T. Seaborg, Joseph W. Kennedy, Arthur C. Wahl, and Emilio Segre. Their application was based upon patent applications covering basic chemical separation processes developed prior to any Government contract. The settlement provided for the acquisition by the Government of all rights, both domestic and foreign, in the subject matter of the inventions and any patent applications and patents issuing therefrom and a release of all claims against the Government arising out of the inventions. The assignments were recorded in the U. S. Patent Office.

On January 11, 1955, the United States Court of Claims dismissed the action of Consolidated Engineering Corp. vs. United States, 104 U. S. P. Q. 111, who sued the Government in connection with certain specific line recorders associated with the diffusion processing plant at Oak Ridge. The plaintiff's petition to the United States Supreme Court for a review of the case was denied on May 23, 1955.

In accordance with the provisions of Section 156 of the Atomic Energy Act of 1954, standard specifications upon which the Commission may grant patent licenses for the use of Commission-owned patents and patents declared to be affected with the public interest are being promulgated.

Civilian Application

In order to discharge its regulatory responsibilities under the Atomic Energy Act of 1954, the Commission established a Division of Licensing in March 1955 and took initial steps in setting up procedures under which private enterprise may assume the major responsibility in developing atomic energy for civilian uses.

Proposed regulations covering licensing of production and utilization facilities, distribution of special nuclear materials, and safeguarding of restricted data were published in the Federal Register (under Notice of Rule Making), so that the public might have an opportunity to comment on them prior to the time when they would become effective. Regulations on access to restricted data relating to civilian uses of atomic energy were similarly published.

Additional regulations covering operators' licenses, radiation protection, and rules of practice are currently being drafted by the Commission for future publication in the Federal Register.

In addition to the new regulations published, or soon to be published, there are already in effect regulations covering the distribution and possession of source and byproduct materials. These regulations,

'The Division of Licensing was renamed the Division of Civilian Application on June 29, 1955) (see "Personnel and Organizational Changes," p. 94).

promulgated under the authority of the Atomic Energy Act of 1946, are being revised to meet the requirements of the Act of 1954, and the proposed revisions will be published in the Federal Register.

Access Permits

In meeting the general objective of encouraging American industry to take an active and leading part in the development of future uses of atomic energy for nonmilitary purposes, it was necessary for AEC to institute a program under which information in this field could be made available to those outside of the Commission program. This was done previously on a limited scale by means of "study agreements" under which companies or groups of companies agreed to spend a certain amount of money on specific study projects and to submit reports to the Commission describing the results of these studies. Some 25 study groups, comprising a total of 81 companies, were granted access to restricted data under this program.

The study agreement program was replaced in April by a more simplified procedure under which restricted data relating to the civilian use of atomic energy, and classified as confidential, may be made available to any applicant who can evidence a potential use or application of the information in his business, profession, or trade. The other conditions to this access are that applicants obtain simplified security ("L") clearances and agree in writing to conform to all AEC security regulations. The Government will waive under Section 152 of the Atomic Energy Act of 1954 all rights to inventions and discoveries arising out of access to such information. Where an invention or discovery is made or conceived in the course of, in connection with, or under the terms of an access permit the applicant will be required to waive potential claims against the Government arising from the imposition of secrecy orders on patent applications and all claims for just compensation under Section 173 of the Atomic Energy Act of 1954.

Under similar conditions, limited access may also be granted to certain specific information classified as secret, if the applicant can demonstrate that such information has an immediate or significant effect on his business, profession, or trade. In such cases, applicants must obtain full security ("Q") clearances and the Government will retain royalty-free, nonexclusive rights for governmental purposes in inventions and discoveries which result from such access.

Applicants for access must also agree to pay all established charges for security clearances, publication, reproduction, and other services furnished by AEC in connection with access permits.

From the time the new access program was announced on April 20, 1955, to June 30, 214 applications for access permits were received. As of June 30, 148 of these were approved and the balance were in the process of being reviewed. The industries represented by these applications include aircraft, electric power, chemical, petroleum, shipbuilding, steel, and equipment manufacturers, as well as research and finance institutions, insurance underwriters, and engineering consultants.

Applications for licenses

During the period covered by this report, the following applications were received for licenses to construct facilities."

1. Consolidated Edison Co. of New York. The company has applied for a license to construct and operate, for a period of 40 years, a nuclear power reactor of the pressurized water type, using fully enriched uranium 235 as a fuel and thorium as a blanket.

2. Armour Research Foundation of the Illinois Institute of Technology. This application contemplates a research reactor of the homogeneous solution type to be used for industrial research purposes. A construction permit was issued.

3. Battelle Memorial Institute. This proposed research facility is a modified "swimming-pool" reactor.

4. Naval Research Laboratory. This is an application for a license to construct and operate a modified "swimming-pool" type research reactor. A construction permit was issued.

5. University of California at Los Angeles. This is to be a low-power "water-boiler" type reactor for research in medical therapy.

6. University of Michigan. The application is for a license to construct and operate a "swimming-pool" type reactor for research purposes. A construction permit was issued.

7. Metals and Controls Corp. The Company's application is for a license to operate a facility for the fabrication of fuel elements. 8. Pennsylvania State University. The application is for a license to possess and operate a "swimming pool" type reactor for research and training purposes. A license was issued on July 8, 1955. 9. Commonwealth Edison Co. of Chicago. The company proposes to construct and operate a 180,000-kilowatt boiling water reactor for production of electric power to be integrated with the existing Commonwealth Edison transmission system.

Since 1953 North Carolina State College has operated a research reactor at North Carolina. This project was started prior to the 1954 'Proposals submitted under the Power Demonstration Reactor Program not listed.