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mitter, be subject to a trial de novo in the
appropriate Federal District Court.
The Trade Secrets Act should be established as
a statute falling within the (b)(3) exemption
These recommendations, if adopted, would materially cut down on the inordinate traffic now being experienced under the FOIA. Not only will confidence be restored to the private sector, but
abuses of FOIA will also be eliminated.
The savings to both
Government and industry are incalculable and in keeping with the
aims of the Administration.
The statement made by the Court in
the recent Agee case on the (b)(3) exemption to FOIA applies with equal vigor to the (b) (4) exemption:
"It is amazing that a rational society toler-
Philip Agee v. Central Intelligence Agency, et al., Docket
79-2788 (D.C. D.C. 1981).
Mr. RADER. Our final witness today will be Dr. Stuart Bondurant, the Dean of the North Carolina School of Medicine.
He is the immediate past chairman of the Council of Deans of the Association of American Medical Colleges, immediate past president of the American College of Physicians, and a member of the National Academy of Sciences, Institute of Medicine.
He is accompanied today by Joseph A. Keyes, staff counsel for the Association of American Medical Colleges.
Dr. Bondurant, will you proceed?
SCHOOL OF MEDICINE, UNIVERSITY OF NORTH CAROLINA;
If I may, I would like to introduce the written statement into the record and for the sake of time add a few brief comments, especially in light of the discussions that have already gone on this morning, if that is agreeable with you.
Mr. RADER. Your statement will be included in full at the completion of the oral presentations.
Dr. BONDURANT. May I say, first, that I am representing the Association of American Medical Colleges, which includes all of the accredited medical colleges in the United States, as well as the 400 major teaching hospitals in the country and some 60 or more learned scientific societies.
In addition, I am representing today the American Council on Education, which is a membership organization composed of 1,291 nonprofit institutions of higher education from both public and private sectors and 169 educational associations and organizations.
As an organization whose members include the overwhelming majority of nonprofit 4-year colleges and universities, this organization is uniquely able to represent the interests of higher education generally on matters of national importance.
In addition, my statement represents the views of the Council on Governmental Relations which is comprised of more than 120 leading research universities, which account for over 90 percent of the funds made available to higher education through grants and contracts for scholarship and research and which certainly in the aggregate account for a large amount of the innovative scientific enterprise of the Nation.
The perspective of these organizations is very consistent with many of the comments that you have heard this morning and is reflected accurately in the written statement before you.
I would observe that since the act was last amended in 1974, there have been three very significant developments that have influenced the way in which the Freedom of Information Act influences the institutions of higher education and the academic scientific process in the United States.
The first was a decision on the Washington Research Project, Inc. which concluded that research grant applications did not come under exemption 4.
The second was the decision in the Chrysler case in which the access of the submitters of information to process was stated to be quite limited under the act. Quite important, in addition, are some of the terms and conditions of the new patent law which went into effect on July 1 of this year.
These three new developments have created problems and substantial concerns for the academic community and for the scientific process which it is serving.
The remedies which are proposed in S. 1247 appear to us to go a very long way toward the correction of these problems. I would only advance briefly three modifications which I believe are entirely within the spirit and intent of the bill.
The first, and perhaps most important, is the need to clarify the issue of whether or not research grant applications are shielded from public disclosure as such.
It is the position and the view of the scientific community that research grant applications represent the product of the most fragile and sensitive creative genius of the country. As they are submitted, they are not the property of the Government but rather are the property of the creative genius of the individual who created them. They do, in fact, constitute proprietary information in the terminology of S. 1247.
The matter is left ambiguous, in our view, as to the intent of Congress with respect to research grant applications.
We would, therefore, urge that it be clarified by stipulating that research grant applications do in fact constitute proprietary information in this sense.
Certainly the recent experience with recombinant DNA technology and the industries that have grown up in academic institutions and with the faculty of academic institutions makes it clear that there are pervasive proprietary interests associated with research grant applications.
I might say, as well, in earlier panels that Mr. Braverman cited the example of submissions to the Government which may not have value at the time they are submitted but may subsequently turn out to be extremely valuable.
Mr. Vladeck challenged the situation by asking under what circumstances would such information come into the hands of the Government.
I would like to point out that this is a specific example of that. When an investigator submits a research grant application to the Government, he has no sure way of knowing what its potential proprietary value might turn out to be. Yet under the act as presently written, he is required to demonstrate such a value in order to bring the information within the scope of exemption 4.
Having said that, let me add that our experience, particularly with NIH, is consistent with the observations Mr. Vladeck also made that at least many of the agencies do have in place processes which inform the submitter of requests.
I do not mean to imply that I am prepared to cite horror stories of actual miscarriage of that information.
A second point for which we would like to urge amendment of S. 1247 concerns the language which defines the people who are covered. Specifically, the bill excludes Government employees, or employees of State or local governments.
It is a fact that some of the State universities in this country are separate from their State governments. California and Michigan are examples of this kind of State university. Others are not. The faculties of many universities are, in fact, employees of State governments. The University of North Carolina is an example.
Under the act as written, as I understand it, the faculty of the University of North Carolina would be classified as public employees and would, therefore, not have access to redress under the act, where the faculty of a private institution of higher education would, and the faculty of the University of California might.
I believe this was not intentional and could be simply remedied.
Finally, we would strongly support the improvements in the process which are included in S. 1247, including support for the de novo review proceedings which have been discussed earlier this morning.
We believe that in the area of some of the proceedings which might concern research grants, there would be some very pertinent examples of the value of de novo proceedings, as opposed to the other type.
We appreciate very much the opportunity to appear before you this morning. We welcome the opportunity to answer questions and to work with you in the future as this legislation matures.
Mr. RADER. Thank you very much, Dr. Bondurant.
First, we have had testimony from other witnesses that a product's approval-or in your case, Dr. Bondurant it would be perhaps a research design's approval-carries with it a right of public disclosure as the price of being regulated, just as a patent holder must make disclosures in order to receive an issued patent.
Would you care to comment on that? Is that a proper view of the Freedom of Information Act? Do your submissions to the Government carry with them the supposition that they are to be disclosed?
Mr. WHALE. I am surprised to hear that comment, because I think the premise is absolutely wrong.
The purpose of regulation is to benefit the public and give the public the assurances it needs as to qualities and standards. It in no way protects the product, if you consider the product an invention, and the investment that went into making that invention.
It also presupposes that the information, say, my company submits is to be made available to other companies for the registration and certification of their products.
To this extent it is a demotivating influence on investments. In fact, I wonder what foolish invester under these circumstances would, indeed, make a similar investment.
The patent system, on the other hand, constitutionally basedalthough let's pass the philosophical implications of that—is designed specifically to protect the inventor, first, and, second, to encourage the investment in inventive efforts. In return for this he gets his patent with the prerogatives it carries.
I do not really see any relationship between the granting of approval to market and the granting of a patent under a patent system.
Mr. RADER. Mr. Virden, you mentioned in your testimony that procurement contracts often carry an agreement with the Government that the information submitted will be held confidential. Those agreements have often been challenged by other witnesses who say that the Government will enter into those agreements just to avoid a disclosure fight.
How would you advise the subcommittee to resolve this conflict between honoring these agreements and the Government perhaps abusing them?
Mr. VIRDEN. The agreements I am referring to primarily are those agreements which we enter into using Government legends. There is an implied agreement that the information we submit with our technical, cost, and management proposals will not be released outside the Government and is specifically for evaluation purposes. In other words, that is the purpose-to give the Government sufficient information to decide which potential contractor will obtain the contract or in the case of an unsolicited proposal whether the idea has sufficient merit in order to permit contract award.
Those legends, or agreements, have been specifically changed to say that they are subject to the Freedom of Information Act.
We view the agreements that we have, despite the court decisions, as being helpful. In my view, they are something that the Government would really like to have without the imposition of the Freedom of Information Act.
In other words, the Government is anxious to get our innovative ideas. They are anxious for us to be able to give them the state-ofthe-art approaches to the solutions of their problems.
I think in the procurement process that the Government does want to honor these agreements. Were it not for the situation with the substantial competitive harm test, you would not have this problem.
Mr. RADER. Dr. Bondurant, is it correct that the scientific research done at nonprofit institutions would be protected by the words "proprietary information” within the standards of S. 1247?
Dr. BONDURANT. I do not think I am qualified to answer the question. It seems to me it is a question of law.
As I understand it, the question is at best ambiguously answered on the basis of the decision in the Washington Research Project, Inc. which denied that research grant applications had commercial or other value.
On that basis, I am not sure that the term "proprietary," unless specifically designated to cover research grants or unless the record some other way shows that would carry.
May I ask Mr. Keyes to comment on this question, as counsel to the Association of American Medical Colleges and a person knowledgeable in this area?
Mr. RADER. Yes; and could I add one aspect to the question as you answer it.
Is "proprietary information” broad enough to cover your problem of doing research under Government grants, given the fact that we may not know the marketability of the idea at the time you make the submission, returning again to the example given us by Mr. Braverman earlier in the day.