Taking inventors' lunch money: provide incentives for sensitive technology research under the Patriot Act.

Author:Pershern, S. Scott
  1. INTRODUCTION II. BACKGROUND A. The Patent Act and Its Consideration of National Security-Affecting Patents B. International Agreements Affecting the Transferability of Intellectual Property Rights 1. The Patent Cooperation Treaty (PCT) 2. Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) C. The Patriot Act and the Its Effect on Capabilities of the Federal Government 1. Purpose of the Patriot Act 2. Effects of the Patriot Act on the Development of National Security-Sensitive Technologies 3. Current Developments and Potential Changes to the Patriot Act III. POSSIBLE SOLUTIONS TO THE ADVERSE EFFECTS OF THE PATRIOT ACT UPON THE SCIENTIFIC COMMUNITY A. Educating Scientists of Their Inherent Rights Under Current Laws B. A Research Based Registration System C. Rely on the Power of the Takings Clause D. A Compensation Based Scheme as an Incentive for Private Sector Inventors to Continue Development in National Security-Related Fields 1. Structure of a Potential Compensation Scheme 2. The Effect of Incentives on the Scientific Community IV. CONCLUSION I. INTRODUCTION

    The United States has long had a well developed system in place to protect the rights of inventors and encourage the development of new technologies. (1) The system was first put in place by the Patent Act of 1790 (the Patent Act), and the policies it embodies are clear. (2) One chief policy at play is the encouragement of the development of new technologies that provide social benefits on a broad scale. (3) The presence of a patent system encourages inventors to share their discoveries with the rest of the scientific community while guaranteeing them an economic return on their precious time and resources that are committed to the development process. (4) The right to profit from one's patented inventions should include the right to profit from the use of that invention overseas. Inventors run into a problem, however, when their inventions have potential national security implications. The Patent Act, in its current form, contemplates this dilemma and provides compensation for inventors when their patent applications are denied for reasons of national security. (5)

    A compensation system does not exist, however, when inventions are thwarted for national security reasons under the Patriot Act. (6) Instead, the government is essentially given a "free pass" to monitor and detect national security issues at will, (7) chilling development in technological fields that might tread on interests of national security. (8) The Patriot Act needs a compensation scheme to provide the incentives that would encourage private sector development of such technologies. While national security concerns should sometimes trump the privacy concerns in a world where terrorist threats are constant, (9) we live in a technological age where scientists are pushed toward the private sector as intellectual property regimes expand. (10)


    The United States has laws that domestically govern the grant of patents to individuals for their inventions. (11) Additionally, it has entered into multinational agreements to help further protect the rights conferred by the U.S. Patent and Trademark Office (USPTO) abroad. (12) A cursory examination of the laws and agreements is important in trying to understand the effects of the Patriot Act on the patent system. Primarily, it is of importance to discuss the current laws in place that grant patent rights in sensitive technologies, as well as their potential enforceability overseas, assuming the patents are available to provide for a commercial benefit.

    A. The Patent Act and Its Consideration of National Security-Affecting Patents

    Title 35 of the U.S. Code is the current embodiment of the Patent Act. (13) The Patent Act confers on inventors a fixed-duration monopoly for the use and manufacture of their inventions. (14) The driving force behind the Patent Act (as well as the driving force behind the various revisions to it) was to promote and encourage the creation of new inventions. (15) The execution of this purpose is carried out in at least two ways. First, granting inventors a monopoly, even for the finite period of twenty years, provides inventors with an opportunity to reap the rewards of their research and labor. (16) In an ideal world, this incentive would not be necessary, and inventors would simply invent for the sake of invention. (17) In a capitalist economy, however, such an incentive is necessary to effectively encourage new development. (18) Second, a patent grant from the USPTO is conditioned on publication of the invention. (19) This publication includes the composition of the invention (identified through its patent claims), (20) its intended use, and other detailed specifications that dictate the operation of the patent and its best form. (21) Because the information is available to the public, other inventors have access to the patent and are able to use it, licensed or not, (22) to further the art in the particular field. (23) Both the grant of exclusivity and the publication requirement together encourage development and production of new inventions. (24)

    Counterbalancing the goal of patent law of promoting the development of new ideas and inventions is the U.S. government's rationale from keeping some inventions out of the public eye, both domestically and internationally. (25) Specifically, some patents received by the USPTO involve technologies that potentially could be adverse to national security interests. (26) These situations are governed by 35 U.S.C. [section] 181, and provide the Commissioner of Patents the responsibility for identifying such inventions. (27) Upon identification, the patent application for the invention in question is then made "available for inspection to the Atomic Energy Commission, the Secretary of Defense, and the chief officer of any other department or agency of the Government designated by the President as a defense agency of the United States." (28) In essence, one government department's discretionary authority gives way to another's discretionary authority. If, in the particular agency or department's opinion, the invention could be a potential threat to national security, the patent is withheld. (29) The inventor of the sensitive technology then would not receive the benefits conferred by the grant of a patent, including the exclusive right to commercially produce and sell the invention domestically or internationally. (30) This effectively removes the incentive for nongovernment employees to develop new and potentially highly useful art in the field. To deal with negative incentives, 35 U.S.C. [section] 181 is coupled with 35 U.S.C. [section] 183, entitled "Right to compensation." (31) It affords an individual whose patent has been withheld under an order of secrecy the right to apply to the head of the agency or department "for compensation for the damage caused by the order of secrecy and/or for the use of the invention by the Government, resulting from his disclosure." (32) After this power has expired, the right to compensation is still enforceable via suit in the U.S. Claims Court. (33)

    The Patent Act is the embodiment of the longstanding U.S. social policy to foster invention and scientific progress. (34) Its foundation of domestically enforceable rights includes situations where the government's interest in national security heavily outweighs the individual's right to leverage his or her invention to the greatest extent possible during the patent's monopoly period. (35) Compensation still remains as an incentive to invent under such circumstances and should not be ignored as a casualty of the interests of national security that 35 U.S.C. [section] 181 seeks to protect. (36) Economic interests have helped give the United States the dominant position it currently enjoys, (37) and the United States should not turn its back on those interests even in light of current world politics.

    B. International Agreements Affecting the Transferability of Intellectual Property Rights

    While the United States has protected patent rights within its borders through the Patent Act, (38) it has also entered into multinational agreements with the World Trade Organization (WTO) to ensure the validity of those rights overseas and make it easier for inventors to obtain protection in foreign countries. (39) Entering into these agreements shows a firm understanding of the importance of transferability of these technologies across international borders as part of the conferred set of patent rights. (40) This understanding is undisturbed by the fact that other countries, whether participants to the agreements or not, still do not fully recognize the rights of U.S. patentees. (41)

    1. The Patent Cooperation Treaty (PCT)

      The PCT, a treaty created by the WTO, was agreed upon in 1970. (42) It provides inventors with a one stop application process for the filing of patents with treaty signatories. (43) Previously, inventors were required to submit patent applications individually to each country, (44) whereas the new administrative process, managed by the World Intellectual Property Organization (WIPO), allows for a singular point of entry--in the patent's country of origin. (45) The PCT greatly eased the application process for inventors by unifying the procedures and reducing the costs of protecting intellectual property rights in foreign countries. (46) As a treaty signatory, the United States committed to ensuring the right of transferability as an essential element of patentees' right to profit from their invention not only domestically, but also internationally. (47)

      An inventor can only file a patent application under the PCT if the subject matter of the patent is not blocked by the national security concerns of the nation of origin. (48) This allows U.S. government agencies and departments to block applications under the authority of 35 U.S.C. [section] 181...

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