The Value of a Secret: Compensation for Impoation of Secrecy Orders Under the Invention Secrecy Act

• Author: By Captain Gary L. Hausken
• Pages: 04

1. INTRODUCTION

   The defense policy of the United States presumes that the nation's advantage in technology can be used to offset the numerical supenonty of potentla1 adversanes To be effectme, the policy must meet two objectives: it must encourage development of new technology relating to national security, and maintain secrecy O V ~ T

   that new

   technology. In an attempt to meet those objectives, Congress created the Invention Secrecy Act' in 1952.

   The main feature of the Act is the secrecy order? Thia order. imposed by the Patent and Trademark Office, requires the inventor to refrain from publishing or disclosing the in~ention.~

   It may also limit the right to file for patent rights in forelgñountries.~

   'Judge Advocate Generays Corps. United States Army Currently Biilgnsd 86 Chlef, Branch 1. Government Appellate Dluvlon. 0 S Army Legal Services Agency, Falls Church. \'lrpmm Prev~ausly asswed as Chlef, Legal Aesrltance and Chxf Cnmmal Law. Presidia of San Franelaco. 1982-1986.

   Tnsi Counsel. 1st Armored Dn& Fed-eral Hepublie of Gsrmany, 1981-1982. Defense Counsel and Senior Defense Caunssl Trral Defenae Service. with duty station st 1st ArmoredDivmon, 1979.1981. Oraduafi Judge Advocate Officer Graduate Couree, 1987. Judge Advocate Officer Baslc Coursi 1979. B.S , Oregon Stale Unwerilty, 1976 J D.. Un~verslly ofMontana, 1979 Membe; ofthe bars of the States of Cahfarnla and Montana. the United States Supreme Coun, the United States Court of Military Appeals. and the Unlted States Cau* of Appeals for the Ninth Circuit This srtlrle IS based upan B thew submitted ~n pmml 68~16-faction ai the requirements of the 35th Judge Advocate Officer Graduate Course

   (19821. Recently, the Patent and Trademark Office implemented two vanatma on the Itatutaw ~ecreey order 61 Fed Reg 32 938 (19861 Bath Vanstion8 include permlti that previously were >saved mparately aid both V_I. ations only apply to ~eerecy orders requested by agencm af the Depart& of Defense

   The first variatmn contam B permit to file patent appllcatlani m eertsln foreign csuntiieii The order q p l i ~ s to inventions whose expo* 18 controlled under 10 U.S c

   (19861 [heremafter iTAR1

   The second variation applies to government camactors whose patent appllcatlans contain rlassifisbie lnfarmatlon under Exeevtwe Order 12,356 3 CFR. 166 (19831 (National Securlfy Informarmi The order canfarms the handilnk ofthe clssalhed data m the patent applicstion tc the general eontraetual requlrementi Dept of Defense, Manual No 5220 22.M. Induntml Security Manual (ISMI.

   g9y;;;~;;t;;

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   The Invention Secrecy Act is phrased in terms of controlling access to the patent application. In reality, it accomplishes much more The mpomtion of the secrecy order effectively controls access to not only the application, but to the ideas and technology contained within It When combined with other forms of information control,6 the secrecy order provides the government wlth a monopoly to exploit the inven-tion contained *.,thin the application. As efforts to modernize the armed forces have increased in recent years. so has the use of the secrecy order

   From 1952 until 1979, the number of secrecy orders remamed rel. atively constant a Since 1979: however, the number of active secrecy orders has increased.'" Statistically, agreaterpercentage ofthe orders imposed every year apply to inventions from inventors who are not government sponsored, either as employees or contractors." This trend

   1s likely to continue. With this increased use of the secrecy order. the

   ~Infmrview wfh Mr John Raubitchek Patents, Capynghfa. and Trademarks Dwimon Office of the Judge Advocate General, Departmenr of the Arm) #Fob 26. 19678 [hereinafter Rauhitchek Inten,ieal

   'The regulations include Executive Order ha 12.366.3 C F R 166r19331 Iprouiding for the claasihearion of informatian for national becunry purpobs~l. the Commodity Control Llst mqro note 2 uhnh controls the expan oi militanl) critical technolog). and ITAR supra note 2, controlling export ai teehniesl data and manufarmred goads that hare B militam use

   92,266116.993 96.039144.038103,219115465126.443126 118

   293 279 263 350 424

   536 329 149

   351334393302 36543913466646164665

   Inferv~er wllh MI Kenneth L Cage, Director. Special Lars Administration Group Group 2201, Patent and Trademark Office,

   Depanrnenr of Commerce (Mar 31,1987'lLRaubitchek Intenleu. sumo note 5 These orders re referred ta as 'JohnJane Doe orders''

   19881 INVENTION SECRECY ACT

   defense agencies expect increases in the number of claims for compensation, and a corresponding rise in judicial

   The trend has already staned, as the Invention Secrecy Act has received increased attention by ~ommentators,'~

   Congress," and the courta.16 Early in 1980, the House Committee on Government Op.erations held hearingdb into the conduct of invention secrecy and other forms of control of private ideas during peacetime. A maJor enncern of the committee, as expressed in their report," wa8 that inventordB receive compensation to the extent that Congress had intended. In the end, the committee's conclusion merely noted that the question, whether the Act is an exercise of the power of eminent domain, must be resolved lg

   About that aame time, the Court of Claims decided Constant U.

   Umted The holding was limited to denying the government's motion far dismissal or, alternatively, for summary judgment. Of greater importance were the issues raised, but not decided, in the decision. The court discussed, in passing, whether the Act constitutes a taking within the fifth amendment.9' In the end, the court concluded that determining the taking issue was not necessary to the holding.

   Although the Invention Secrecy Act has been m existence for roughly thirtyfive years, defining what constitutes 'gust compensation" under the statute has proved elusive. At the heart of this determination is whether the Act constitutes a compensable "taking" within the meaning of the fifth amendment.'' Few eases have approached this ques-

   ..

   "Pnuate Idoos Xeormz8, morn note 6. H R Rep No. 1540. 56th Cone, 2d Seis

   (15801

   '*See, e g, Constant v United States. 617 F 2d 235 1Ct CI 15801'6Pnuole Idem X~anngs. ~vpmnote 8>'H.R. Rep No 1540. 96th Cong , 2d Sesa 6.7 11560)

   "The term "mventor'' includes the ~nsenfor (who 1s applying far the patent!. any Eo-muentor, and all other interests in the invention other than tho* of the Unlted States Government The Invennon Secrecy Act does not dlfferenrlate between the inventor and others who have gamed rights through him Both the benefits and penalties of the Act apply equally to the epplicanf and my other person who has anmterest through the applicant. with the exceptran of the government Other interestl Include: SYIC~J$~S,aaaignees, legal representatms. and myone m prwty wlh the inventor or other person having an interest m the invsnfian

   "H R Rep No 1540, 86th Con8 , Zd Seia 8 118801 *O617 F 2d 235 (CL C1 19801

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   __

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   t10n,2ãnd none have thoroughly analyzed whether imposition of a secrecy order may result m a taking

   This article will analyze the issues involved in determining x,hat constitutes lust compensation.'' within the meaning of the Invention Secrecy Act, for use of the invention by the government and for damage caused by imposition of the secrecy order The ariicle will focus an the historical development of the statute, whether the imposition of a secrecy order constitutes B fifth amendment taking, and ISSUBS

   involved in determining what constitutes a compensable injury under the Invention Secrecy Act 24

   11. HISTORY

   Efforts to limit the patenting of inventmu for reasons of national security first aroae during World War I. At the time It was aptly noted that "those inventions which m e of most use to the Government during a time of war are also those which would, if known, convey useful information to the enemy.""

   1. THE VOLUVTARY TENDER ACTz6

      Under the Voluntary Tender Act the Comm,ss,onerofPatents could order an invention to be kept secret and withhold the granting of a

      "Constant Y United Sfatea, 617 F2d 235 ICr C1 1580!. Farrand Optical Co I

      UmtedStatea.326F2d32812dCn 19631,modib~ng197F Supp 755'SD SY 15618

      "Th>s article wll not dricuri related questma a8 to whether the .kt LI an uncm stnutima1 limitation on the right to freedom af ipeerh and whether the Act pmwder adequate due proeeae pmfectm far inventors US C a m amend! I & \', see Gilbert, supra nafe 13

      '*VVoluntary Tender Act, eh 55, 40 Stst 394 115171 npeded by Invention Secree) Act of 1951. ih 4. 66 Stat 3 119521 lcodihed ai amended at 36 U S C 4b 181-168,1982 ,) Although not officdly titled. the Act became knaun BP the Foluntari Tender Act or the Seerecy Act See Fulmer Y United States. 83 F Supp 137, 144 ICr CI 15498 The term Voluntary Tender Act 18 used to clearly difisrentiate this early act from the later Invention Secrecy Act

      The Voluntaw Tender Act w.x m e of 33 acts enacted on October 6, 1917 moil of which relate to preparation far the enrn af the United States into World War I The Voluntary Tender Act read as fallows

      "Constant Y United Sfatea, 617 F2d 235 ICr C1 1580!. Farrand Optical Co I

      UmtedStatea.326F2d32812dCn 19631,modib~ng197F

      Supp 755'SD SY 15618

      "Th>s article wll not dricuri related questma a8 to whether the .kt LI an uncm stnutima1 limitation on the right to freedom af ipeerh and whether the Act pmwder adequate due proeeae pmfectm far inventors US C a m amend! I & \', see Gilbert, supra nafe 13

      Rep No 119. 66th Cang 1st S~JI 1 119171'*VVoluntary Tender Act, eh 55, 40 Stst 394 115171 npeded by Invention Secree) Act of 1951. ih 4. 66 Stat 3 119521 lcodihed ai amended at 36 U S C 4b 181-168,1982 ,) Although not officdly titled. the Act became knaun BP the Foluntari Tender Act or the Seerecy Act See Fulmer Y United States. 83 F Supp 137, 144 ICr CI 15498 The term Voluntary Tender Act 18 used to clearly difisrentiate this early act from the later Invention Secrecy Act

      The Voluntaw Tender Act w.x m e of 33 acts...