Some of these applications undoubtedly disclose inventions of military value which in the interest of national defense it is desirable to keep secret, and in such case the Army-Navy Committee makes a recommendation to that effect to the Commissioner of Patents. A number of pending applications were placed under the provisions of the earlier acts and certain of these applications subsequently issued into patents after the order of secrecy was rescinded. Suit was brought in the Court of Claims on several of these patents, as provided in the acts. In view of the similarity of the rights created under the present Public, No. 700, and those created under the earlier acts as regards suit in the Court of Claims for use by the Government of the invention claimed in the patent, the pertinent holdings in the decisions of the court are discussed herein. 17 16 While in the ordinary suit for patent infringement in the Court of Claims, no recovery can be had for government use prior to the date of issue of the patent, these Acts provided for recovery for government use "to begin from the date of the use of the invention by the government," or, in other words, before the patent has issued, provided the proper conditions precedent are fulfilled. There is no authority for suing under the Acts where the Commissioner of Patents has not ordered the invention to be kept secret.15 The fact that an inventor voluntarily maintained secrecy with regard to his invention during wartime is not enough.1 The statute clearly contemplates a real tender, i. e., the bringing to the attention of the government the essential facts with reference to the invention so that subsequent use of the invention may prevail with knowledge of liability for the same. The disclosure to the War or Navy Department of plans, designs, and specifications of a device for the manufacture of which plaintiff was subsequently awarded a governmental contract, is not a sufficient tender to the government under the Act, where such disclosures were made before an order of secrecy was issued on a patent application covering the device, and where, at the time the disclosures were made, the idea of user in response to a tender does not appear to have been within the contemplation of the parties.18 The Act expressly required a tender and a subsequent use by the government before the right to sue for compensation attached.1 Disclosing the application to a government contractor and subcontractor, and through their intervention receiving governmental approval to substitute the invention disclosed in government contracts, is manifestly too indirect to warrant a conclusion that plaintiff, acting for himself, really tendered or intended to tender the invention to the government.20 Where an applicant tenders to the government an application allowed but withheld from issue under the Act by reason of an order of secrecy, and the applicant, after the order is rescinded, permits the application to becomee forfeited and later obtains a patent with broadened claims upon a renewal of the original application, he cannot render the government liable for infringement of the broadened claims prior to the renewal of the application. It is not a condition precedent to recovery in the Court of Claims that the application be allowed before the order of secrecy is rescinded, nor is the Commissioner of Patents required to wait until he ascertains the issue of patentability before enjoining the applicant to secrecy." Where the Commissioner of Patents grants the applicant permission to disclose the invention to certain firms working on Army orders and, through no fault of applicants, the invention gets into the hands of other domestic armament manufacturers, such is not a violation of the order of secrecy." Where the government has used the invention prior to tender by the applicant and continued to use it thereafter, the inventor, if and when a patent issues, is entitled to recover from the government for use from the date of commencement of such use. Furthermore, a patentee making tender and otherwise complying with the Act, may recover damages in a suit in the Court of Claims even though the invention was 21 24 15 Rodman Chemical Co. v. United States, 65 Ct. Cl. 39 (1928); cert. den., 277 U. S. 592, 48 Sup. Ct. 598, 73 L. ed. 1004 (1928). 18 Ibid. 17 Ordnance Engineering Corp. v. United States, 68 Ct. Cl. 301 (1929); Supplemental opinion affirming previous judgment and opinion, 73 Ct. Cl. 379 (1931). 18 Id., at 358. 19 Zeidler v. United States, 61 Ct. Cl. 537 (1926); cert. den., 273 U. S. 724, 47 Sup. Ct. 236, 71 L. ed. 860 (1926). 20 Id., at 556. 21 Gathmann v. United States, 71 Ct. Cl. 680 (1931). 22 Allgrun v. United States, 67 Ct. Cl. 1 (1929). 23 Id. at 35 to 37. 24 Id. at 44. used only by contractors in connection with government contracts, such contractors not being required to use the process invented." 26 The only reported case involving these earlier Acts which was not a suit in the Court of Claims is the case of In re Haskell. This case involved an appeal from an order of the Commissioner of Patents rejecting two claims of a pending patent application, upon which, during the World War, an order of secrecy was issued by the Commissioner of Patents under the provisions of the Trading with the Enemy Act." Among other reasons for reversing the order of the Commissioner rejecting the claims in suit, the court held that the fact that the order of secrecy was issued was evidence that applicant had made a valuable discovery and that "this action (of issuing the order of secrecy) would not have been necessary had the Gardner disclosure 28 really anticipated this invention." It appears that the court in this case was misled as to the true meaning and purpose of the order of secrecy. The order expressly stated that it was no indication of the value of the invention." In addition, the order of secrecy may have been issued very early in the prosecution of the application, even before the first Patent Office action on the merits of the application. Again, the order of secrecy may have been issued, not because the application disclosed a new invention, but because it disclosed old matter in a form then being used by the military or naval forces which it was desired to keep secret for reasons of national defense. In view of the foregoing, it clearly appears that the mere fact that an order of secrecy was issued on an application is no indication of the value or patentability of the matter disclosed therein. Public, No. 700, vests the power to issue the order of secrecy solely in the Commissioner of Patents. It is understood, however, that this official generally follows the recommendation of the Army-Navy Advisory Committee in issuing such orders. It is the practice of this committee to recommend withholding from issue only those applications, the publication or disclosure of which would clearly prejudice the national defense. Applications which disclose secret military devices now being used by the Army and Navy, or secret devices projected for use in the near future, fall into this category. Applications not disclosing secret devices now used but which disclose other devices which would clearly suggest to one skilled in military matters such secret devices as are now in current use by the Army and Navy, are generally recommended for secrecy. But where the application discloses a device, process, etc., of possibly military value, but which is unlikely to be adopted by the Army or Navy, recommendation is usually made that the application be permitted to issue in due course. While the ArmyNavy Committee is vigilant to recommend secrecy in a proper case, it is nevertheless circumspect in its recommendations, since every application placed under the Act creates a potential claim against the government. In addition to permitting suit in the Court of Claims, where the proper conditions are fulfilled, for government use of an invention upon which an order of secrecy has been issued, Public, No. 700, provides an alternative method of compensation for such use by the government, i. e., by agreement between the applicant and the Secretary of War, the Secretary of the Navy or the chief officer of any established defense agency of the United States. This provision of the Act permits an applicant to receive compensation for government use of his invention without the necessity of an expensive and often-protracted suit in the Court of Claims. It would also appear that, in a proper case, compensation may be paid to the inventor under this provision while the application is still pending, and the invention still under an order of secrecy, in full settlement for government use of such invention. While this provision might appear novel and extraordinary, it is actually not, for it not infrequently occurs that an agency of the government purchases a license under a pending application having allowed or allowable claims therein. But, in another respect, this Act does provide a means of compensation for an applicant on whose invention an order of secrecy has been issued, above and beyond that provided in the earlier Acts. Public, No. 700 provides that he may 25 Id. at 45 to 48. The evidence shows, however, that the War Department had full 'knowledge of, acquiesced in, and even encouraged the use of the invention by government contractors, and that its use saved the government both time and money on cost-plus Contracts. 26 278 Fed. 326 (App. D. C. 1922). 27 Supra, note 11. 28 A British patent cited by the Commissioner of Patents as disclosing the "broad idea" of applicant's claims. 29 Supra, note 14. be compensated by the Secretary of War, the Secretary of the Navy, or the chief officer of any established defense agency, as a result of an agreement, in full settlement and compromise for the damage accruing to him by reason of the order of secrecy, whether or not his invention is ever used by the government." Such damage might result from his loss of the immediate right to apply for foreign patents. It might also result from his loss of the right to sue infringers other than the government, provided the application reaches the allowance stage and is still withheld from issue by reason of the order of secrecy. It would appear that such damage would have to be actual and not merely conjectural before compensation could properly be awarded under this provision. While, if the applicant considers the compensation offered by the prescribed officials in full settlement for governmental use of his invention to be inadequate, he can refuse such, and resort to suit in the Court of Claims if and when a patent issues on his application, it appears that the decision of these officials is final and not reviewable by the Courts as to any compensation offered the applicant in settlement for damage resulting from the order of secrecy, other than that arising from use by the government." Public, No. 700 makes provision for a suit in the Court of Claims for government use of the invention disclosed in the application, but makes no provision for suit in that court where the invention is not used by the government. Summary and Comparison Considered from the viewpoint of effectiveness in preventing the disclosure of inventions important to the national defense, Public, No. 700 is to be preferred to the Three Year Act. There is listed below in tabular form those features of the two Acts which, when compared, lead to the conclusion just stated. A. Public, No. 700 1. Threatened enforced abandonment and denial of the right to sue are effective deterrents both against disclosure and foreign filing. 2. The Act is much broader in scope than the Three Year Act and covers applications for all inventions, the disclosure of which, in the opinion of the Commissioner of Patents, would be detrimental to the public safety or defense. 30 Mr. RICH. Will the gentleman explain the bill? Mr. LANHAM. I shall be glad to. This is a bill unanimously reported by the Committee on Patents, a bill which is very important in the matter of our national defense, and it is desired by both the War Department and the Navy Department for that purpose. Our present patent laws provide that in time of war applications for patents on inventions that have peculiar application to national defense may be kept secret in order that those inventions may not become available to foreign governments. The provision of this bill is for a period of two years to permit and authorize the keeping of inventions and applications therefor secret if they, in the judgment of the War Department and the Navy Department, are needed for our national defense. In the protection of the inventor the bill goes further than the law has heretofore gone in this regard. The former law provided that there should be no compensation whatever to the inventor making the application until his invention actually was used. This bill protects the inventor by making provision for compensation in case his invention is useful for national defense but is held secret in order that it may not become known to foreign governments. * * * * * Mr. CHURCH. Will the gentleman point out to me the language in this final bill, H. R. 10058, whereby if an inventor's idea is not used by the government he at any time gets paid for his invention? Mr. LANHAM. He gets it in the proviso on page 2, beginning in line 16, which reads as follows: "Provided, That the Secretary of War or the Secretary of the Navy or the chief officer of any established defense agency of the United States, as the case may be, is authorized to enter into an agreement with the said applicant in full settlement and compromise for the damage accruing to him by reason of the order of secrecy, and for the use of his invention by the government.' 86 Cong. Rec. 12725-6 (1940). 31 Mr. CHURCH. In other words, there is merely authority in this bill for the Secretary of the Navy and the Secretary of War to enter into agreement with him, but this bill gives the Patent Commission and the Secretaries of the Navy and of War the power to shelve the invention for a period of 2 years. It is because of this far-reaching effect of the bill that I am opposed to its passage by unanimous consent on this calendar, and the gentleman is acquainted with my feeling in the matter. Mr. LANHAM. Quite so. 86 Cong. Rec. 12726 (1940). (The bill was subsequently passed by the House of Representatives without further amendment.) 32 If enacted as permanent legislation, or extended until the end of the present emergeney. Viewed as temporary legislation, the effectiveness of this Act is considerably weakened, since upon its expiration: 1. The Commissioner of Patents can no longer issue additional orders of secrecy. 2. The orders of secrecy previously issued will automatically become unforceable. 3. Every pending application in the U. S. Patent Office is scrutinized to determine whether or not it should be placed under the provisions of the Act. B. The Three Year Act 1. The Act is applicable only to those applications owned by the government.. 2. Only those inventions of which the national-defense establishments have knowledge can be placed under the Act. 3. The Act itself provides no effective deterrent against disclosure or foreign filing by the assignor to the government." 33 34 4. The domestic prosecution of the application is in the hands of the government. It also appears that Public, No. 700 is more effective than the Three Year Act in safeguarding the rights of inventors. This statement clearly follows if the following aspects of the two Acts are compared. Under either Act the applicant receives the full seventeen-year period of patent protection if and when he receives a patent. C. Public, No. 700 1. The inventor or applicant retains title to the application, as well as complete control of its prosecution to allowance. 2. An application placed under the Act is prosecuted to allowance in the same manner as any other pending application. 3. Provision is made to compensate the inventor for government use either (a) as a result of negotiation, or (b) by suit in the Court of Claims. 4. Provision is made to compensate the inventor for damage resulting from the order of secrecy. D. The Three Year Act 1. The title to the application is assigned to the government and government attorneys have full power to prosecute the application. 2. The prosecution is delayed and is often extended over a long period. 3. No provision is made to compensate the applicant or assignor for government use while the application is pending, or for other damage, except as the assignment may provide. 35 Where a choice exists, it appears, in view of the foregoing, that applications will henceforth generally be placed under the provisions of Public, No. 700, and that the Three Year Act will now be less extensively employed than during the period from the end of the last World War until July 1, 1940, when it was the only procedure whereby patent applications could be filed on secret military and naval inventions and these applications withheld from issue as patents as long as the public interest required. TRENDS AND RECOMMENDATIONS Due to the importance of strategic materials in modern warfare and the effectiveness of the blockade in cutting off normal sources of supply of such materials, inventions covering substitute materials and processes for making more efficient use of the strategic materials available have an ever-increasing importance in modern warfare, and are often far more important to a belligerent than most inventions of a purely military nature. For this reason it appears that Public, No. 700 ought logically to be extended to cover not only inventions of a military nature, but also important inventions on strategic materials and substitutes therefor which, if made available to a possible enemy, would be prejudicial to the public safety or defense of the United States. While it does not definitely appear from the discussion in Congress that it was the intent of that body that 33 But the assignment may contain covenants by the assignor that he will maintain the invention secret and refrain from filing foreign applications thereon. 34 It appears, however, that the willful disclosure of any invention relating to the national defense to a person not entitled to receive such disclosure, or the filing of a patent application on such invention in a foreign country where the applicant has reason to believe such filing will be to the injury of the United States or to the advantage of the foreign country, may be a violation of the Espionage Acts. 40 Stat. 217, 50 U. S. C. § 31 (d); Act of June 15, 1917, c. 30, tit. I, § 1; and 40 Stat. 218, 50 U. S. C. § 32, Act of June 15, 1917, c. 30, tit. I, § 2. 35 When Public, No. 700 was approved by the President. 36 Public, No. 700 should be so broadly construed, such a construction is logically inferable both from the wording of the Act granting the broad power of issuing the order of secrecy to the Commissioner of Patents, and from the basic purpose of the Act. The only reason for questioning the soundness of such broadened construction is that Congress definitely intended that the Commissioner of Patents, in issuing the orders of secrecy, should have available the advice of qualified representatives of the War and the Navy Department, and these departments, while they have in recent years become interested in the supply of strategic materials, are primarily interested in purely military and naval inventions. The following recommendations appear advisable, in view of the foregoing: 1. Public, No. 700 should be enacted as permanent legislation, or should at least be extended until the end of the present emergency. 2. Public, No. 700 should be amended, if necessary, to expressly cover important inventions on strategic materials and their substitutes. Hon. CHARLES KRAMER, Chairman, Committee on Patents, HENRY BRUTON. DEPARTMENT OF COMMERCE, House of Representatives, Washington, D. C. MY DEAR MR. KRAMER: In accordance with your request at the hearing on H. R. 3359 before your committee, I am suggesting the following amendments to the bill: Page 1, line 6, cancel "person" and insert citizen or resident of the United States nor any corporation directly or indirectly controlled by or beneficially owned by any citizen or citizens or resident or residents of the United States, nor the legal representatives and assigns of any citizen, resident, or such corporation. Page 1, line 9, after "country," insert with respect to any invention made in the United States. Page 2, line 24, after "discloses," insert in violation of said order. These changes will, I believe, overcome all of the consequential objections made at the hearing. Cordially yours, Subject: H. R. 3360. CONWAY P. COE, Commissioner. CUSHMAN, DARBY & CUSHMAN, Hon. CHARLES KRAMER, Chairman, Committec on Patents, House of Representatives, Washington, D. C. MY DEAR MR. KRAMER: Replying to your letter of the 28th ultimo regarding the above bill, the committee on patent law revision of the American Bar Association has taken no action in respect to the bill. Speaking individually, however, I can say that I am sure the committee would endorse the bill, subject to a change being proposed by the American Patent Law Association, which will be represented at the hearing on the 11th instant by the chairman of its laws and rules committee, Mr. Stowell. This amendment provides, in effect, that a court may require a defendant who is found to infringe, but against whom no injunction may issue, to post a bond sufficient to cover his infringing activities during the emergency. I am strongly in favor of the bill as a very fair and logical way of meeting a somewhat difficult situation. Thanking you for writing me, and with best regards, Yours very truly, 38 Supra, note 30. Ibid. 315217-41--20 JOHN J. DARBY. |