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In his memorandum, Mr. Cramton advised that the Regulations "can be brought within constitutional limits" by the addition of a provision denying the contractor exclusive rights when he was employed "specifically for the purpose of making or developing the invention and the contractor made no substantial independent "20

contribution to the invention

process.

GSA did not heed this

advice, however, and the final Regulations still specifically

authorize the granting of exclusive rights "regardless of whether the invention is or is not a primary object of the contract."

§ 1-9.109-6 (d)(1).

The defendant has made two efforts to avoid the Justice

Department's opinion that the Regulations are unconstitutional. First, he suggested that the court should not consider the Cramton memorandum at all because it is "an internal recommendatory memorandum."

("Points And Authorities In Support Of Defendant's Motion To Dismiss And In Opposition To Plaintiffs' Motion For Summary Judgment." p. 19, n.7). This suggestion conveniently overlooked Attorney General Richardson's declaration that the views expressed in the memorandum "reflect the official position of the Department of Justice." (JA 28).

Defendant's second effort was more dramatic.

During the

June 14 hearing on the motions in this case, counsel for defendant

20 JA 31.

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on rebuttal, proffered a letter signed that very day by the Acting Attorney General, Laurence H. Silberman, rejecting some, but not all, of the conclusions reached by Mr. Cramton. In addition to the fact that Mr. Silberman supplied no legal authority to support his conclusions, they are also suspect because they were submitted in response to a plea received the previous day that the failure to disavow or reject the Cramton memorandum "would seriously impede" the defense in this and another case. (See JA 32-36). Mr. Cramton's conclusions, on the other hand, are based on extensive legal research and were submitted in response to a request for a legal opinion when there was no motive to reach a particular conclusion. In fact, he must have known that the effect of his views would be to undermine the legal basis for the President's patent policy.

A.

Inchoate Rights To Patents And Inventions Are "Property"
As That Term Is Used In Article IV, Section 3, Clause 2.

The Regulations provide for the "allocation of rights in inventions resulting from federally sponsored research and development contracts." § 1-9.107-1(a). Such allocation is to occur either at the time of contracting21 or after an invention has

2199 1-9.107-3(a) (4) (11) and 3(b).

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been identified.22
The initial inquiry is whether such contin-
gent and inchoate rights are "property" as that term is used in
article IV, section 3, clause 2. The answer to that question

can be found from the cases which have defined that term in other contexts, as well as from the decisions involving the constitutional provision itself.

The term "property," standing alone, includes everything that is the subject of ownership. It is a nomen generalissimum, extending to every species of valuable right and interest, including things real and personal, easements, franchises, and other incorporeal hereditaments.

Scranton v. Wheeler, 179 U.S. 141, 170 (1900) (dissenting opinion; citation omitted; Fifth Amendment.); Accord, Hoyd v. Citizens Bank of Albany Co., 89 F.2d 105, 107 (6th Cir. 1937) (statute); Globe Indemnity Co. v. Bruce, 81 F.2d 143, 150-51 (10th Cir. 1935) (statute); United States v. Anderson, 45 F. Supp. 943, 949 (S.D. Cal. 1942) (statute).

Since the Regulations are intended to resolve "the subject

of ownership" as between the government and the independent contractor, it is clear that such rights are property under the

228 1-9.107-3(c). In such cases, the effect would be similar to that where an exclusive license was granted under the regulations declared unconstitutional in Public Citizen v. Sampson I, except that the contractor would almost certainly obtain any exclusive license that might be issued.

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definition of Scranton v. Wheeler, supra. It is obvious that if the drafters of the Constitution had attempted to list everything of value which the government might own, article IV, section 3, clause 2 would have assumed a prolixity of unmanageable size, and they would surely have omitted some items of value, particularly those not yet invented or even imagined. Thus, they simply referred to "other Property" as the "nomen generalissimum" to include those things of value which the government then owned or might in the future acquire.

Until recently, the Justice Department agreed with this position that patent rights arising out of R & D contracts are property. (JA 29). Mr. Silberman, however, decided that "[t]he case law does not support the [Mr. Crampton's] assumption that inchoate rights to inventions or patents resulting there from are

123

property,' an opinion for which he is unable to provide any legal support, undoubtedly because the authorities support Mr. Cramton's conclusion that inchoate rights are property within the meaning of article IV, section 3, clause 2. See, Royal Indemnity Co. v. United States, 313 U.S. 289 (1941); Ashwander v. TVA, 297

U.S. 288 (1936); 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); 41 Ops Att'y Gen. 311 (1957).

23JA 36.

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In Royal Indemnity Co. v. United States, supra at 294, the

Supreme Court held that an Internal Revenue agent had no authority

to release a surety from its obligation on a taxpayer's bond,

because the "[p]ower to release or otherwise dispose of the

The

rights and property of the United States is lodged in the Congress by the Constitution. Art. 4, § 3, C1. 2." (emphasis added). right to enforce a surety's obligation is, of course, inchoate, being contingent upon the obligor's defaulting, an event of no more certainty than the developing of an invention in the course of research and development work. Relying on Royal Indemnity, the court in Harrison v. Phillips, 185 F. Supp. 204 (S.D. Tex. 1960), implicitly held that contingent rights are property within article IV, section 3, clause 2, when it ruled that the United States was not bound by the Coast Guard's granting to the seller of property to the United States a right to repurchase the property if it should ever be declared surplus.

Any doubts that the term "property," as it appears in article IV, includes rights to property which is not yet in existence are dispelled by Ashwander v. TVA, supra at 330, in which the Supreme Court held that the "right to convert [water power] into electrical energy" is property belonging to the United States. The specific water power at issue could not have been in existence at the time the right to convert it into electrical energy was sold because