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clause 2 of the Constitution provides that "Congress shall have Power to dispose of and make all needful Rules and Regulations

respecting

The

Property belonging to the United States." plaintiffs in this action contend that since these Regulations purport to authorize a disposition of property belonging to the United States, and that since Congress has not authorized the defendant to make such a disposition, the Regulations violate article IV, section 3, clause 2.

Without reaching the merits, the district court dismissed

the complaint, ruling that the seven plaintiffs who are members

of Congress and who sued in that capacity lack standing to challenge

2

the legality of the Regulations." This appeal is from that ruling.

However, since there were no material facts in dispute in the district court regarding the merits of this case, and since the issues were fully briefed by both parties, this Court should also decide the merits. See, e.g., New Jersey Chapter, Am. Physical Therapy Ass'n. v. The Prudential Life Ins. Co., U.S. App. D.C.

F.2d

(No. 72-1789, Sept. 6, 1974); National Automatic Laundry & Cleaning Council v. Shultz, 143 U.S. App. D.C. 274, 443 F.2d 689 (1971); Blackhawk Heating & Plumbing Co. v. Driver, 140 U.S. App. D.C. 31, 38, 433 F.2d 1137, 1144 (1970).

2They will be referred to herein as "the plaintiff Congressmen," or "these Congressmen."

1. Did the district court err by holding that members of

Congress do not have standing to protect their constitutional rights under article IV, section 3, clause 2, which they allege have been infringed by an action of the defendant?

2. Do the Regulations, which authorize federal agencies to grant private persons exclusive rights to patents and inventions developed with federal funds, constitute a disposal of government property in violation of article IV, section 3, clause 2 of the

Constitution?

3. Has Congress authorized GSA to promulgate these Regulations?

REFERENCES TO PARTIES AND RULINGS BELOW

The plaintiffs are Public Citizen, a non-profit organization supported by public donations, and Representatives Herman Badillo, George E. Brown, Michael J. Harrington, Henry Helstoski, Edward I. Koch, Benjamin, S. Rosenthal, and Fortney H. Stark. The defendant is the Administrator of the General Services Administration and as

such is responsible for the formulation and promulgation of rules and regulations issued by that agency, including the Regulations at issue here. On July 24, 1974, District Court Judge Joseph C. Waddy, entered an order, accompanied by a memorandum opinion, granting defendant's motion to dismiss and denying plaintiffs' motion for summary judgment. (JA 18).

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STATEMENT OF THE CASE

A. Statement of Facts.

3

In order to implement the patent policies of two Presidents, GSA issued two sets of regulations. The first prescribed the procedures for the granting of licenses, including exclusive licenses, to existing patents and inventions owned by the United States. 41 C.F.R. Part 101-4 (1973). In an action by Public Citizen and eleven congressmen (including all seven of these Congressmen), District Judge Barrington D. Parker declared those regulations unconstitutional in violation of article IV, section 3, clause 2, a ruling which is now on appeal to this Court.4

The second set of Regulations, which are the ones involved

in this appeal, allows federal agencies to insert clauses in research and development contracts which grant to the contractor either "title,"

3President Nixon's policy, Memorandum and Statement of Government Patent Policy, Aug. 23, 1971, 36 Fed. Reg. 16887 (Aug. 26, 1971), essentially reaffirmed President Kennedy's patent policy, Memorandum and Statement of Government Patent Policy, Oct. 10, 1963, 28 Fed. Reg. 10943 (Oct. 12, 1963).

4Public Citizen v. Sampson, Civil No. 781-73 (D.D.C. Jan. 17, 1974), (JA 44], appeal pending, No. 74-1619, defendant-appellant's brief filed Sept. 20, 1974. (Hereinafter this case will be referred to as "Public Citizen v. Sampson I.") The district court also held that defendant had violated the Administrative Procedure Act by failing to publish notice of the proposed regulations in the Federal Register. That issue is not involved in the instant case.

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"exclusive rights," or "greater rights than a nonexclusive license"5 to patents and inventions developed under those contracts. In essence, therefore, these Regulations accomplish the same objectives as the regulations declared unconstitutional in Public Citizen v. Sampson I--viz., the transfer of exclusive rights to patents and inventions developed at government expense from the government to private parties.

The instant Regulations are potentially more pernicious, however, because they permit the give-away of patents whose nature, utility and value are unknown at the time of disposal,

whereas

under the other regulations, the Executive branch was at all times aware of the nature of the patent that it was making available on an exclusive basis. Additionally, thèse Regulations have a greater impact than those in Public Citizen v. Sampson I because the bulk of today's government research is conducted by private industry. Whereas in 1953 the Government spent $1.0 billion on research in government laboratories and only $1.7 billion for research by private

5§§ 1-9.107-4(a)(3), 1-9.107-3(b), and 1-9.107-3(a)(4)(ii) & 3(c), respectively. Plaintiffs agree with the conclusion reached by the Justice Department that presumably "greater rights than a nonexclusive license" means an exclusive license. Memorandum from Roger C. Cramton, Assistant Attorney General for the Office of Legal Counsel, to Bruce B. Wilson, Deputy Assistant Attorney General of the Antitrust Division. (A copy of this memorandum appears at JA 28). For the purposes of determining whether these Regulations violate article IV, section 3, clause 2, any distinction between "title," "exclusive rights," and "exclusive licenses" is immaterial. Consequently, we have used the phrase "exclusive rights," which for purposes of this brief includes title and exclusive licenses. The Regulations also provide for the granting of nonexclusive licenses, the legality of which has been accepted for fifty years. See 34 Ops. Att'y Gen. 320 (1924).

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industry, by 1973 total federal government expenditures for research and development had soared to $16 billion, of which approximately 6 72% was being allocated to outside contractors. The magnitude of

these R & D expenditures explains, in part, why these Congressmen are concerned about the effect of defendant's actions and are asserting their constitutional right to control the disposition of the fruits of those expenditures.

On February 15, 1974, plaintiffs filed suit to enjoin the enforcement of these Regulations, which were scheduled to go into effect on March 4, 1974. With their complaint plaintiffs filed a motion for a preliminary injunction which they asked to have consolidated with a trial on the merits. The primary bases for the preliminary injunction motion were the decision in Public Citizen v. Sampson I declaring similar GSA regulations unconstitutional and the formal opinion of the Justice Department that these Regulations were unconstitutional.7

Plaintiffs withdrew their motion for a preliminary injunction on March 4, 1974, after defendant canceled the effective date of the Regulations. 39 Fed. Reg. 7925 (March 1, 1974). On

National Patterns of R & D Resources, Funds & Manpower in the United States, 1953-1973, National Science Foundation, Feb. 1973, at 26-27.

7See discussion pp. 21-23, infra.