Mr. DADDARIO. So that getting down to one of the problems of this committee, when we then begin to explore the idea of title, where the title falls within the Government or with the private individual, the problem then strays away from the question of secrecy because we then are getting into property rights and ownership of the invention which results in a patent, and it is in this area there are some differences? Mr. LADD. Yes. Mr. DADDARIO. Now, near the end of your statement you mentioned again the secrecy position, withholding patents for such inventions from issue. Just how does that work? What responsibility is there in the patent holder? How is the proposition controlled? How is the individual or the company prevented from doing this? Mr. LADD. I gave the initial part of the explanation, but I will take it from the beginning to make the whole picture perfectly clear. First of all, the defense agencies supply us with a description of the categories of inventions in which they are interested, and we, as a matter of routine, report to them and call to their attention any inventions, any applications for inventions, which fall within these categories. They are reviewed, the applications are reviewed, by representatives of these agencies. Upon this review, the decision is made as to whether that agency wants the invention classified as "secret," or whether it is not interested in the application from a secrecy point of view. Sometimes that decision is not made immediately. The experts will often want to check back with other people in their own departments before they reach a decision on a given case. But in any event, that decision is made by the defense agency affected. That document is never declassified until it is reviewed and declassified by action of the agency which classified it in the first place. If the case is marked as a secret case, a notice is sent to the applicant to that effect. He is notified that he may not divulge the contents of that application, and we do not pass the case to issue in any event until the defense agency revokes that classified status of the application. Mr. DADDARIO. In the event someone else were to come along with the same idea, how would the right of the first individual or company be protected covering the period of time after this particular question would be classified? Mr. LADD. Let me give you an answer which is not immediately responsive to your question, and then come back to your question. The act provides that where an application has been classified as secret and issuance delayed because of that classification, the applicant may recover compensation for his loss. If an application covering the same subject matter were to come in, obviously it, too, would go through the screening net, so to speak, and get caught. Aside from that, however, there is nothing to prevent these two applications from going through the same kind of interference proceedings that we have in the Patent Office, to determine the priority of invention as between two rival applicants. Mr. DADDARIO. Under those circumstances, you people would know that these two were in conflict, but the new inventor would not? Mr. LADD. That is correct. Mr. DADDARIO. In this way the original man, or the original company, is protected? Mr. LADD. That is correct. Mr. DADDARIO. You have well set out, Commissioner, how you have, in fact, followed pretty well the procedure established by the Atomic Energy Act. For all intents and purposes, the National Aeronautics and Space Agency assumes the same position, and yet, as I understand it, only in one instance of all the applications made has title fallen to the Administrator of NASA; is that correct? Mr. LADD. Yes. Mr. DADDARIO. So this would indicate that the Administrator, both this one and the previous one, had taken a very liberal attitude insofar as waivers are concerned? Mr. LADD. It would appear so, Congressman. I don't think I am in a position to generalize. Mr. DADDARIO. Just from the standpoint Mr. LADD. From our evidence, it would appear so. Mr. DADDARIO. Has there been a significant workload added to your office as a result of special attention you have to pay to the NASA problem? Mr. LADD. I think the answer to that, Congressman, is "No," because, as I say, this dovetails in so well with what we would ordinarily have to follow in the security provisions that it does not add a substantial amount to our ordinary workload. For example, if we were relieved of this procedure, much of it would nevertheless have to be done to carry out the secrecy provisions of the act. Mr. DADDARIO. Mr. Bell. Mr. BELL. I have no questions, Mr. Chairman. Mr. DADDARIO. Mr. Yeager. Mr. YEAGER. Mr. Commissioner, you said this procedure is a fairly simple one. Isn't one of the reasons that it is simple is because of the manner in which you have chosen to interpret the act-you and NASA both? As a practical matter, you don't examine every application that comes in with this in mind; isn't that correct? Mr. LADD. I am not sure, Congressman, I understand your question. It is true that there has been cooperation between the two agencies, and that this is undoubtedly one of the reasons why we have been able to carry out this procedure as well as we have, but I do not understand your question about reviewing every application. Mr. YEAGER. Do you, in fact, review every application with this in mind, to see whether or not the application has significant utility for aeronautical use in space? Mr. LADD. Yes, I see what you have in mind. I see your question. I think I can answer it best in this way. Our divisions in the Patent Office are in a sense organized around the classifications of the technical arts that we have. There are many classes and subclasses. This is the formal classification system we use for searching purposes. Any given class or subclass will be assigned to a division. The heavy majority, the heavy concentration of cases in which inventions covered by this act would arise, are in the security divisions in the first place. As a matter of fact, that is how the security divisions were organized. Now, as I explained, also, when applications come in in the normal course, and do not go directly into the security divisions, so to speak, they are screened by this list, by means of this list, by the chiefs and assistant chiefs in the other divisions and referred to the security division to see whether or not a statement should be necessary under section 305. In that sense, sir, you could say that every application is screened, in the sense that we do have a procedure to try to see to it that every application which comes in is given a review for this purpose. Mr. YEAGER. It is possible, however, that applications for inventions which may come in in a different category conceivably could have utility, even though it were not anticipated in the way you have it set up. It is not likely, but it is possible? Mr. LADD. It is possible. I think the most accurate way to put that, Congressman, is this: This whole classification to a large extent involves judgment, and aside from disagreements in judgment, mistakes can occur, yes. Mr. YEAGER. Mr. Commissioner, I appreciate the promotion. I am on the committee staff, not a member. Mr. LADD. I am sorry, Mr. Yeager. Mr. DADDARIO. I don't know if that is necessarily a promotion. Mr. YEAGER. On page 11 of your statement, sir, you indicate that to date statements have been found appropriate in over a thousand applications. Do you have any notion of how many applications had to be surveyed to come up with this thousand or so, approximately? Mr. LADD. I don't, but I think that Mr. Campbell does. Mr. YEAGER. All right, sir. Mr. CAMPBELL. Sir, I would be able to estimate only roughly, since we don't keep any records. I think it was several times that number, perhaps 4,000 or 5,000 have been reviewed at the level of the security divisions. Mr. YEAGER. Last summer, when Mr. Johnson and Mr. O'Brien of NASA were here, we asked then about these provisions-that is, subsections C, D, and E. To the question as to whether or not this was a troublesome procedure, Mr. Johnson said that they are extremely burdensome, and he repeated that phrase. He said: "I would say up to the present time we and the Patent Office had put a lot of effort on these sections with very little practical result, but we have to do it." If I understand your answer to Mr. Daddario's question, while this is a burdensome thing, apparently, to NASA, it is not particularly burdensome to the Patent Office as an administrative procedure. Mr. LADD. Yes. Mr. YEAGER. How many patent applications does the Patent Office receive, by the way, in 3 years? Mr. LADD. Last year we received 81,171. Mr. YEAGER. With only one direction received to issue a patent to the Administrator, it would appear that, as Mr. Johnston has indicated, the usefulness of this section may be in some doubt. Mr. LADD. I think the only response that I could make to that is that we have found the present provisions workable. On the other hand, we have in the past worked with the Atomic Energy Commission for revisions of procedures governing the filing of applications relating to atomic energy. I think perhaps it would not be irrelevant if I were to say that if the provisions now prevailing are uncomfortable to NASA, or not as effective as they would like, we would certainly be most willing to cooperate with them in working out procedures which are less burdensome and more comfortable for them. Mr. YEAGER. Let me ask you along a slightly different line-this is a slightly different idea. One of the arguments we have heard for title theory from Government has been the fact that by use of this procedure, such as Atomic Energy uses, and the Space Administration uses, information concerning the inventions gets around faster. This leads to several questions I would like to ask you. What is the lagtime now between the filing of the application for a patent and its granting, normally? Mr. LADD. On the average, 312 years. Mr. LADD. On the average, 311⁄2 years. Mr. YEAGER. Three and one-half years. Can you tell us anything about what the Patent Office may be doing to make use of new techniques, new equipment, automation, and so forth, to speed that up? Mr. LADD. Yes. You have opened a very wide door, and I promise not to abuse the invitation. In the first place, there has in recent years been a steady increase in the number of applications which have been filed. As I said, last year we received 81,171 cases. This year we estimated 83,000, and actually it is going to run somewhere between 85,000 and 86,000. We have now undertaken a step which is a quasi-emergency step in nature, and that is to say that we are concentrating our actions, our activity, on cases which are rather well advanced in prosecution. In short, we now have made action on all cases special after the second action on the merits. Is that readily understandable, or shall I explain that in some detail, Mr. Yeager? Mr. YEAGER. I don't understand it-not all. Mr. LADD. I can explain rather quickly. When an application is filed, a search is made, and a judgment is made as to whether or not the application discloses patentable subject matter, and an action is taken, a formal communication to the applicant. The prosecution of the patent application is in effect an exchange of correspondence or views or arguments between the examiner and the applicant, and each of these actions is called that, an action. It takes, on the average, between three and four actions, and that is an average. Sometimes there are many more-for a case to pass out to issue. The result of the step that we have taken, which is to make every action after the second on the merits special, and to set in the action a shortened statutory period for response, is that the answer must come back in from the applicant in a shorter period of time. We are authorized by statute to set this shortened period. So the objective is to take the cases which are ripest and move those along to issue as quickly as possible. Now the gain from this can be illusory, because by taking the ripest cases now, you are doing this at the expense of next year when you will have to go back and take the cases which are not so ripe, but this is one of the things that we have done in what I call a quasiemergency step. Another thing which we are going to experiment with in the Office, and this is under consideration now, is to take a division and to divide the docket into two sections, one an active docket and one an inactive docket. Under the present procedure a case may await anywhere from 6 months to 2 years before the first action on the case comes. Then there is 6 months, as provided in the statute, ordinarily, unless there is a shortened statutory period set, for the applicant to respond. What you get, then, is a very long and extended cycle, in all of the applications, of prosecution. We are going to try to see how a system like this will work out as an experiment. The dockets will be handled more as a court handles its docket, that is to say, a case will be called up and given an intensive examination, with shortened statutory periods, while the rest of the cases remain in a dormant file or dormant docket. One of the things we will have to work out is the procedure of priorities of moving cases from the so-called inactive docket into the active docket, but this is another thing we are working out. You mentioned a moment ago something about information retrieval. I would have to emphasize that is a very long-range program. While we do have limited machine assistance searching in the Patent Office today, it is limited and the experience cannot be readily extrapolated to broader classifications of arts. We have had a number of studies done on our research and developement program on the application of information, retrieval techniques, to searching. All of the repotrs have recommended that we advance this program vigorously, but none of them has held out any hope that this offers a short-run solution to the workload of the office, and, as a matter of fact, each one of them has been careful to say it is not a short-run solution. Mr. YEAGER. Do you have a particular target or goal in regard to how much you would like to cut it down? Mr. LADD. We would consider ourselves up to date if we had, rather than the 200,000-odd applications that we now have pending in the Office, around 140,000 applications. That is to say, it is inaccurate to describe the 200,000 cases we have pending as a backlog, because you would expect to have in any event a normal working inventory. This has been worked out as 12% as applied to the annual intake. Since our annual intake is around 85,000 that would give us a normal working inventory of about 140,000 cases. Mr. YEAGER. How much do you think this would reduce the time between the filing and the granting of the application? Mr. LADD. We should be able to get patents out then in not more than a year and a half, if we ever achieve that happy state. Mr. YEAGER. Is there, to your knowledge, any better way of disseminating the information than the normal process which the Patent |