-9

Finally, defendant suggests that in the event that this Court finds that plaintiffs have standing, the case should be remanded to the district court for its views on the merits. We disagree. Defendant moved for summary judgment in the district court on the merits, as did plaintiffs. While the case is important and the issues complex, any decision of the district court will almost certainly be appealed.

Since the entire patent policy of the United

States for research and development contracts depends on the regulations at issue here, the sooner a decision is rendered either supporting or rejecting defendant's position, the sooner order will be created in this area. Because the district court brings no special expertise to this case, and because of the need on the part of all concerned for a prompt resolution of the substantive issue, we urge this Court to reject defendant's suggestion of a remand and proceed to the merits since all parties agree that there are no genuine issues of material fact.

II. ADMITTEDLY VALUABLE RIGHTS TO FUTURE PATENTS DEVELOPED
PURSUANT TO GOVERNMENT FINANCED RESEARCH AND DEVELOP-
MENT CONTRACTS ARE "PROPERTY" WITHIN ARTICLE IV, SEC-
TION 3, CLAUSE 2 OF THE CONSTITUTION

Defendant's analysis of the question of whether the rights to future patents and inventions developed under government financed research and development contracts are "property" within the meaning of article IV, section 3, clause 2 of the Constitution begins with

the following erroneous premise, from which all his erroneous "Since defendant's procurement regulations deal

conclusions flow:

with rights to inventions,

the starting point for any

constitutional analysis of property interests in inventions is

Article I, Section 8, Clause 8 which is specifically concerned with intellectual creations." (Def. Br. 50). If this were a patent case,

then defendant's starting point might indeed be correct. But this is only incidentally a patent case; it is primarily a constitutional law case involving the interpretation of article IV, section 3, clause 2 and not article I, section 8, clause 8. The question presented in this case is what did the Founding Fathers mean by "property" under article IV, and in answering that question the law of patents is of very little if any significance.

Thus, in an argument of twelve pages on whether these rights constitute "property", defendant does not begin to discuss cases arising under article IV until he has completed ten of those pages, and his discussion even then glosses over the crucial decisions in merely a page. More importantly, he never attempts to analyze the problem in terms of the purposes of article IV, section 3, clause 2, nor does he defend his position in terms of whether those purposes would be furthered by including or excluding the patent rights at issue from "property" as used in that provision of the Constitution.

This provision was included by the Framers because of "the obvious necessity of making provision for the government of the vast territory acquired by the United States." Ashwander v. TVA, 297 U.S. 288, 331 (1936). Coupled with this necessity was a "fear that 'the sale and disposal' might become 'a source of such immense revenue to the national government, as to make it independent of and formidable to the people.' Story, Const. §§ 1325, 1326." Id. Therefore, article IV, section 3, clause 2 did more than permit the disposition of Government property: it assigned to Congress the exclusive power to make decisions concerning such dispositions, and thus, like so much else in the Constitution, it is concerned with the crucial function of separation of powers. Because this assignment of functions was necessitated by the concern of the Framers over dispositions of Government property having considerable value, the proper method for determining whether particular rights are "property" within the meaning of article IV is to ascertain whether they are valuable assets, and if so, they qualify as "property." Therefore for this case, it is simply irrelevant whether the patent laws recognize any "property interest" in these rights, and the only question to be asked is, would permitting the Executive to dispose of rights to future patents and inventions developed entirely through government financed research and development contracts be consistent with the purpose of article IV in allocating the right to dispose

of valuable assets to Congress and not the Executive?

12

The sole authority relied on by defendant which attempts to examine the meaning of "property" under the Constitution, Brenner v. Ebbert, 130 U.S. App. D.C. 168, 398 F.2d 762, cert. denied, 393 U.S. 926 (1968), employs a mode of analysis similar to that which plaintiffs urge in this case. Plaintiffs in Brenner claimed that to refuse to accept a late payment on a patent application was a deprivation of the applicant's property without due process in violation of the Fifth Amendment. In examining that question, this Court stated that it had "considerable doubt whether appellees' allowed but unissued patent is 'property' as that term is used in the fifth amendment." (Id. at 764, emphasis added). Thus, as in Brenner, the question here is the meaning of property under the relevant constitutional provision--here article IV--and not under the patent laws as defendant has argued.

Nonetheless, defendant seizes upon this Court's dicta in Brenner and asserts, without any citation or explanatory rationale, that "the concept of property under the Fifth Amendment guarantee against deprivation without due process would be at least as broad, and probably broader, that the concept of property under Article IV, Section 3, Clause 2." (Def. Br. 56). It is not a question of which concept is "broader," but rather whether the purpose of each constitutional provision would be served by including the case before the court within the term property as used in that provision. While defendant acknowledges that "the meaning of 'property' 'must be

determined, from its context as illumined by the subject treated

and the objectives sought. Superior Bath Co. v. McCarroll,

312 U.S. 176, 180 (1941)" (Def. Br. 57), he wholly fails to undertake

that analysis in this case.

The cases arising under article IV, section 3, clause 2 relied on by plaintiffs provide the proper approach to defining property under that article. In all those cases, the courts have used an

expansive definition of what constitutes property in order to jealousl guard Congress' right to dispose of these things.

The grant was made in broad terms, and
the power of regulation and disposition
was not confined to territory, but extended
to "other property belonging to the United
States," so that the power may be applied,
as Story says, "to the due regulation of
all other personal and real property
rightfully belonging to the United States."
And so, he adds, "it has been constantly
understood and acted upon." Story,

Const. § 1326.

Ashwander v. TVA, supra, 297 U.S. at 331. Thus, a surety's obligation

on a bond, Royal Indemnity Co. v. United States, 313 U.S. 289 (1941), a promise to maintain government roads, United States v. City and County of San Francisco, 112 F. Supp. 451 (N.D. Cal. 1953), aff'd, 223 F.2d 737 (9th Cir.), cert. denied, 350 U.S. 903 (1955), and potential electrical power, Ashwander v. TVA, supra, all were treated as property, so that they could not be disposed of without Congressional approval.