-------

----- ---- -

Serial 

7 Oct 1953 

MEMORANDUM FOR THE SECRET.ARY OF TBE ARMY 

SUBJECT H R 1152 83rd Congress let Session 

1 Reference is ma.de to the bill H R 1152 83rd Congress 

1st Session For the Relief of William F Friedman concerning 

which I have previously expressed my views at the request of your 

Department 

2 Mr Friedman has now requested me to forward through chan 

nels a letter which he has written to the Honorable Chauncey W Reed 

Chairman of the Rouse Committee on the JudicJ.a.ry setting forth argu 

ments in support of' the full amount of the a.ward sought in H R 1152 

Mr Friedman s letter is classified as CONFIDENTIAL - SECURITY 

INFORMATION which I believe to be the proper classification I 

also believe that the statement in paragraph 8a(l)(b) of Mr Fried 

man s letter is accurate according to the best-available information 

However I have not undertaken in any way to examine the validity of 

Mr Friedman s arguments 

3 I have considered carefully the question of forwarding Mr 

Friedman s letter to the House Committee on the Judiciary and believe 

that there are two aspects to the problem which involve important 

matters of policy namely (l) the desirability of releasing classi 

f'ied information to Congress in support of a private bill and (2) 

whether the release of this inf'ormation would require the prior 

security clearance and indoctrination of the Congressmen concerned 

4 Since Mr Fried.man s letter contains inf'ormation involving 

both Communications Intelligence and Communications Security the 

special rules involving those branches of' intelligence apply In 

view of the lJJJlJ.tations established by higher authority I doubt 

that the Department of Defense or any o:f its Agencies could properly 

resolve the above question 

5 In viev of the fact that the Department o:f the Army is the 

action agency for the Department of Defense on H R 1152 I am sub 

mitting Mr Friedman s letter to you and would appreciate your advis 

ing me whether you would have any objection to its transmission to 

CongressDBn Reed if proper authority for release could be obtained 

/s/ Ralph J Canine 

RAJ.PH J CANINI: 

Lieutenant General US Array 

CONFIO;::~~ Tl~tr ~e;_c~I a;.;.;s;_s""':"i fi;;;..e~dF-a-n-d:-a-p_p_r_ov_e_d-:-f:o-o-r-re--:1-e_a_s e-;-b-y---, 

SA on 09-04-2013 ursuantto E.O. 1352 

Incl 

Mr Friedman s ltr w/Incls thereto 

cc- DIR. AG Leo:a1 Advianr 
REF ID :A71827 1 

~ONFIDEi~~T17:.... 

~t Oomn.l ~h J Ci.nine, WA 

Director 

•t1om.1 kCW"1V AIJlfarrl 

J>ear CeueraJ. Ce.tii t-.e I 

~~-~, ~ 

stetJ" 11'( thr c r1 : 1 "

1 

U 1 told TOU IOUl9 weeks e.go, the llcmorable Robert i9 8Wvella 

ka tka:;v of tba Ar1113 I Milt & report I dated. 6 ~ ]953 to tbe 

~lo 

~ 

~i;;eoy W Jeed.~ CblJ.m ot the ~ Comittee on the 

1 1n ~ to a.a ll52, 83rcl Congreu, lat '"81on a 

11ill. •rw ~ iell~f ot nut-w F ~ A cggy ot '1:Je report 

tae. 'beell given mo ~ Hr- Beed 1n ~ that l a:f.&ht ~ cc:cmieats 

thei'eOIJ. 

% ba\~ ~ed '/!fl ;igtl'PQJ•ta 1n tbe 1Acl.ose4 letter, which 1a 

~ 

iu the tora qt a brW ill ~till~ Of ~ ~ or_ ~mid. 

l~ in a.it 1152, and. which l would like to have tonra.rd.e4 

to Mr leed 1'~ ciJNmela 

~ nMon t(# l"O\\t~ tj:)e ~ed letter through cbfmnela 1a 

that l do M bg.VQ ~ R\l'!or11;¥ to dj•cl.ooe claas11"1ed 11\fOZ1JU.tioll 

to .. ~ AJ.eo, it 1a »Oellible tm.t the ~ Qf ~ Art5:t1 

attor 

~ 

~:!• -Ule ~owed. letter to Hr Jeri, -.;/" v.1111na to 

his ~t OU !Jl 11'21 tba8 :perbei'B m1c!ng it lTM~ 

tQt~it-iolfi- ~ 

thai pg 10'.t 1n ~co tar &JV consideration '¥QU sq appro 

l'f1.a,tely give to thia :mttar I l &a,, 

~I 

Jr S( MO: 
REF ID:-A71827 -~ -~.._.,...,,""""~ ~ rw;n. ~~~~-- ' 

,... -~..._ ..... 

CONFID!'£;1i\~;t;Wl.=n~~~«ftlRMAil3NHonorable Chaunoey W • Reed 

Cbaitnan1 Car;! ttee on the Judioiar,r 

Hmso ot Representatives 

0$.ar Mt'• Reed I 

v..hington 31 D. C. 

18 September 

1

1.953 

1.., JlECerenee -is 'Sda to a latter. dated 6 JUJ:/' 1953, which t~ 

Honorablo !toberl 1.'. St,c,vons, Soorotaey or t.he Ar11Y1 llG1'1t 1'J1). 1d.t~ rer,;ard 

to R,'I?, 1152, 83rd Congross1 lst Session, 8. bill "Far the Reller of 

V!JJiam F., ~" You .baVe boon k1nd enoogh to prodde 11e ld.th a 

t:'tt'fi of i!ial;~ !.etfS- tar C611t '811t1 ena ta:! ea.so 1n 1"9terence I appord the 

lAttter as tnclocure 1 hereto. 

e, •• The tollo-d.ng r~""!'a!:ih is quoted trcn paee h or Inclooure 11 

-- 11~ Deoartmont is of the vifN that Ml9. Meehan ehoald. ~ ~~af.00 !"or the loss of bis property right in the 

1tMmtfoni1 i-right vlttch woul.cl permit tdJa axclnsivel7 to 

lllAb_, uao Ind Hll the 19'Ubject matto.r o.f' b1a im'mtions, er 

to t'eap pJ!'Ofit fro1 tho lico:'la'J.n;; oi.' otbe.n to pract.ice the 

brtantions. R:lcctMt. tor tho withhol:ll..ng of pate.11ts of hi.a 

iJmmtions :1n the intorest of tho securltQ of the Urd.ted 

&tatco 1 Mr• h"ie&'lan could have sought financial gain t.hez'o· 

.f.rroa. Where the trui t or an inventor's labor bas been ol 

lltlbsta.nti«l benefit to his GaY8l'Itat.tnt am bis right to seek ~ tor hie ettorts is impfdred tor flO ~ a period ot 

tiao £or securl. ty reasons, it ia equitable that ha bo ccmrpenated. tor his loas. Thia view, is in accord with the po1Jo7 ol the Department o! enc~ technolo;Lcal advanatnont. 

'to deJ:v" an !nvootor tho right to eeek gain f'l"Om hie irrnmtions ~ becuuso ttey are Ti tal to our national de.tense 

11\d. ~ eecur1.f:\1 ot the Ckrverme11!-.t while perm!.tti.11g such 

pursuit by inventors in other r.1.el.dS where seaur!t;y interests 

are not parar.iou.nt, wool.cl ho di!lcri.nd.na.t.ory and 'HOUld dia- c~& advanc91S'lt in •ttera vital to our national date:".se. 11 

'b. 't'Jle toragoi.'!g tim!rc ist. of c~e. a aoutca or -ruch {lt'atitieation-to ... , e::L?lee it epitarl.ses the roaulte or the sttdy Made on 

H.tlt, ll~2 by" tho Bd.litery ds?artmonts, a study which culr.d.nated in a 

favorable roport baaed upon the equitable CO"lSiderata.one 1.avolvod. 

3ot a. trl!Ving atatod the view tmt I shauld be conpetJ.Sated !ar the 

loss ot rif property right in =q invantiona1 Inc1osure 1, page S, cant.1.mJ.ea 

as tollovs1 

"""'.ll ~ -in. 'I' 1-1.Jr~..__,,,..._ ___ ,,.. .. ~------=:::--... <~;~ -~--' 
q ... ,.. i P+o il<OW -

REF ID: A7182J-~ 

C :::)~~FDDENTIA._ 

11.U pointed out in ~h 2c ot CJeneral Oii.Dine' • letter 

or 29 hbruar)r 1952, it 1B iq,)oeaibla to evaluate •• lri.d•m'• 

loaa.~ abeence at more 4ef'1n1te 1Df2!'J!et1on than 1a at ~ ihi tfuli'GtO, the Jlepartment 4oelJ not tii'VOI' &ll &1ilii;{ 

iJt t= '-sns.tuae m °'1t 1Jl n.:a. u52. lih1.le tb1• u a •tter 

tar 1ibo Congress to determ1.ae1 the Dlperttaezlt teela that an 

a\M.:rd. or t25,ooo.oo ~HI be a4equate CCllJl?enae.tion tar ... 

h~ lil!d on the .~ a~ hand." (~be.111• aup,plied) 

&· lt is clear, theret01"8, tbat the Dapal'tment aclmovledGea 

u obligation on the be.sis or equitable ccma1derat:1QDS Md queat1ona Olll¥ 

tbe ieanitu&t ot the &llari. aQUiht a a R. 1122. .. _....-;. __ -

4. ~~used 1D at@.ti.ng the Department's doubta on the laatretutticmed phaae or the Bill can be cODStrw!d to COl18titute an invitation 

to #Ubm.it l1I01'e 1nt'onat1cm and a44.1tiQJlal. .tacts which might attord. a better 

'bu1• for evaluatin6 ~ loss 'lbia letter, tberetore, 1s being aent ;J'CAl tor 

tAe ~se ot :prnen1;1.JJ6 the dea1red aM.1-tioml. intonaticm and ta.cteJ 

but it mwst at the BEt.=e U. be noted that security ccmaiders.tiona in\pose l"d~ietions OQ llbat cau be aid 1n a document ~ tbi• eort. I am caatiamit, however, that on the basia ot the intonation~ fUrJ11abed Ul4 

tho ad.ditiO®l. 4&tfl !l\lbmttted ~ thia letter, the COJJDittee w1ll have all 

t1ie tn'idenco reqU.ired to substantiate an award of' the Jll!gDituda at that 

IOUght 1n B.R. 1152. 

- 1t With these pnrl.1111n&riee out ar tbe VIQ', I 8ball DOV proceed 

to Mt tQrt.h tbo into.rma~ .m IMW.ticmal ta.eta which DIQ" be wsetu.l to 

f&l aild ;your Cc:adttee. 

6. I.· l'int,~X ¥1.eb to tllphasize that I -.ke =point wbatsoever, 

\m4er the eqlli:table OOM14ere.tiOM involved in the caae, or the f'act that 

ntf' hmrntiomJ were and .im are 1n use by the u.s. Government or of 

their vort.h aa COlltr1but1cma to CID" na.tional Werme• Xven though, u 

General Cen1 ne m. lltated., l\Y 1Dventiona over a perl.ocl ot J9G.Z'8 have been 

(If YfJr:f subatautial value 1 tb.U Qovfmlmant aQl it.a allie&J, llZJd. even 

a 

1-""i : 111 -ii - W.ltif 

-~ 

-1 --_,,, 
REF ID:A71827 

!£.~:JNF~~~~~tr~AL 

..J 

t.liougl.1 in Secl"e'tary Steven:J' letter thero U9 e Yer'.f Cl.early stated :inplication thay J3l1" inventiona have been v.1tal to aux: national de!ense, I 

aoburloo~ wit.liout reservntion that the Goval"la)nt owes me noth:ine what- llOC/'I~ ror tho uae o! rrt3" inventions, s!.n:o t.'16 conditions under which the,y 

lM?'o Jiade vora such as to~ give the Govortr.ent all tho rights it needs to 

practice er to take tun advan~~ of those inventions. Seeo~, ! 'Wish 

to sa:; that I a.--a in cotlplate accord with the Dapart::umt of t..lie ~in the 

op1nion that ! should 'bo eonpensatod CJrt.J.y far the potential financial loss 

at.tr:Umtabls to the effect or with.'1olctl.ng of patents or 'l!J1' inventions, :1n 

t..he interost or t..ho aecvr:tty of t.."19 United ~tateo. In tact, I er.all be 

\;;~ •atis.t'icd if t..~ co-;pcnsatiou rs basoo on t.~ factor elona (.provided 

due coneidarntion is giycn thoreto. ]It is ld.th a view to a:rto~ a 

basis for ucertclning the axtent of J.oss that the- data sumttted honin 

vUl. bo df.rectod1 in en endeavor to justify tho anow:rli of the award souetit 

!n HtR• U52. FU..~aem~o, i.'l veighing the extent of the loss it should 

be nated tb ~ tl'e SQcrecy restrictions ho.vo bt!el1 in at.teat for a comider-

.nt.e 1~ of tis; in one cnno t.lwy have bean 1n effect OYl'!t" 20 ;,oars, 

and in tuo ea.sec, 17 :;ears. In the tivo cases at.ill uMe1" aecrec7 restrictions it is probable that thoao :mstrietiom 'Will cont1.mle to ramdn in 

ettect. tar several or~ aore ~ .. it is not ;vat possible to •«¥hew ~. tat it also bo notod ttat in the cue ot tuo other invent.1ona1 nt a: tion::; were never filed thereon booauee a! secur1 coil:d.dt se n ons 

.... .. 7'% i iE P' '• i\ f r 5 't OI '( I F ' I ~ IW "if 9 iK i q-,.. f & t ..... • ti :? er•; ?P' IJ .. lt1aoit1 E W I • i R j ? R 

1 'l'bis is ccns~nant ld.th l.ha follotdne er-~t frca s. 271 8.)rd Congress., 

lat Sem:d.an.1 "A 9ill t.o author.tse the establ; s'trient of an im"entions 

Award Boe.rd with the ~nt ot Deronse,, and for other pu:rposesa 

Dec· 7{c)f ~p" 7~ " ... in deterrtl.nine tho mount or 81V IUCh ~ cone1deratian shall bo given to -

~il : : : b t.ha extent tD vhioh tbe inventor has beon. deid.Bd the benefits 

or eo·-:inorcial axploitatton or au:h invention 1n con&eqll8l1Ca or f1!J.7 

~restrictions :ll!Jposed b:r t'1e United stat.ea." 

I See ~np'l 2, paze 2 or Inclosuro l! seo alao .~ote on pa£;e 4 of 

!J2closure 3. '1'ha tollouinc is quoted rrom page 41451 Vol. ll ot IflJport ~ lteQ~at:!ono ot the Attornoy Geoar~ to tr.o President on Invontip.tion or Qavern.'l\Ont Patent Practices or.d Pol5c~eu, 1947. (The extract 

w.tara to r:u tuo :Lnvent.iono notod 'tmrcin) 1 't:rhcro haw bee:\ im'ontions, 

wch as ceri:.3.1.n darl.eco in the cryptographic fLeld aad.o by the SiGneJ. 

Carps1 as to 1-1hloh th::i need tor ~~ :!e so s:mat that the Var Department :is~ even to file a p:itont applica:td.on,n 
- ~ .. 

-warab.ts far cer...ain anal.yticcl.. operationo in tho Cr"JPtolo~ f.told.1 no 

1!U)Xlu 'Will bo said about then in this letter. 

b. !t ie obTloua that cna WVJ' or ascertain:ing the extant of 'lfftl' 

loss wulCt be to tr.r to measure t..lie potc'ltial !insncial vwth or q 1nvont1.t:l!l8 it it ~ oeen or were po~sible to ex:r;il.oit TV' crmnercial. rights 

t..wedn, bot1' i'~eign a.'1Cl dooostic. In tl-.:J.s cow.ect!on attentJ.on is 

invi'tcrl to .,ar~l-\ 2e cf tle:mra1 Ganin.e's letters 

112c. ~•tion of the ca:norcl.al ~$ib:Uitioo or the 

Irie chm invent! ms 1s dU'ficul t, Ii.a tar aa ia 1momi. ~ 1 l'elativol7 lltUa canmarc:tal use is Dade 0: privaa;y B18temB 

in this countr';,-~ ~apt. in bl.UlZa and other .tinancial orga.iizattons, and their uee o! l:atsi.?10ss codo:l is cor.10.onlJ" dictated 

a& JlllCh by econa:tV consi..d13r3.tiotlS • eecu.rit.n novortheleas ~t be e:.d.d that a l'l'&Brkat !or tide 

7. a, Let us tako up f'ir5t tho potont:L!lit:Lo.o for the exploitation, 

in textteig'ji oountr1ea1_ f?f the cmm:iercial rights in tho inventions in 

quest1.on. It 1a in t.h.1s area that tho nocassity for iJrlpoaing secrecy 

Httriotions! based upon security conaidarnt!ons1 tJJ:'e'V'8nted l1Y' exploitine 

a quite prof t.a.ble market. 

b.1 !n thl.e connectlon it is pct"1i.o.pa not ad.es to note that tbe 

Supreno ~ in 1933, in its study o! the vell-knCMl case at the um. ted 

States w. ~iller Condei18er Carporat.ion (289 u.s" 178)1 quoted witha11t 

Cett"..ent, the tolloid.ng hon a ~ 'by sn Intorde;>artmelltal Ccnmi ttoe 

•tabli8'1ed by executive order to study the quest.ion ot pa.tc~ts made b;r 

Cl<::tv'erm.lnt tr.plczyeas I 

n, * • It mat 110t be lost s1-e.'1t o£ that 1n ~ it :ls 

the eoostitut1.onal right of f!f'1f1l7 paten.too to mc:pl.oit bis 

patent as he J1MQ' desire, houuvar ~ it 1!18¥ appear to 

eade.Ttor to !1odii)r this right in the interest at the plbl1.o 

when t..~ patontoo is in the ~ sa:n:S.ceir" 

o. It is quito obvioua t..Liat. too Saeret.a.r.Y of the Arv has ta.keil 

tull co~once ot t~ point,. as can bo noted in tha last s«ito'lCe of 

the extrnct qu.oted in pe.ragra:ph 2£ above,, Yherein he states t 
REF - lD:A71827 

Honor.able Cbauncay "1. Beed 

"'..Co d.eJV" an inventor the right to seek pL."l from. his irmmtions morel.)" because they a.re vital. to our national dafenae and 

the security ot tha Oovernmant, wbile perm:ttt~ su.eh pursuit by 

im'entors in other fields wherO security interests aro not paraaaunt, would be disc.riminatoey an:l would discourage advancanont 

1n •tte:ra vital. to our national detense.n 

d,. In this connection I deem it pertinent. to add that the record 

v1ll ehw-tbat I have never questioned eithor the proprioty or the dao!rabllitq or inposine secur.tty reotrictt.ons on "lflY' inventions in the interest 

of nationnl daf'ense. 

a. •• It ii! obvious that ::re must be OOTJB correlation be'twan the 

.N.rumoial-value at an invontion the utilitq of the apparatus covered 

by the patent thereon, It ~a with a view toward pe:mit~ web a correlation that the tollcnrl..n8 in!ormat1on is sumttted1 

(l) During the U.S. participation in World War ll the large 

majorit,- of the highest-level, vritten C0111'1Unications of the U.S. 

Qovornmont ard especially thoso or tho military forces tn.ereof 

{inoludit\; .Arl'lG"1 Nav.r, ani Array Aii- Forces) were enciphered bT means 

o! oeypto-equipt1enta baaed upon tho im'entiobs listed in H,R. 1152. 

In this cormeotion it i• to be noted -

{a) That throughout world w~ n the u.s. aovornr.iont 

g&inad vitel intellJ.emce fron sncr:r.y ccm:mnicatione because 

u.s, ~ta were able to aolTe the hichast lavel cr-;ptoeonr:nnlcptiona ot ~' 1~ arxl Japan dur.tl\'; that war.i and 

(b) That tho Gettl4n1 Italio.n and Japanese Q~s 

wero d.e.nied e1m11ar vital iiltellieEllCa fl"OIZl u.s, l:dgheat 1.ttrel 

OOtt;:il..rd.oations 'because the orypto-eq~ta uaed by the u.s. 

t'loveJ.'onment tor such erypto<anud.cations succesatul.ly J"eSisted 

.ii atte:ipts of cryp~o stat.ta or the German, Italian am 

Japanese Claverm.ionta to solve such u.s. c.eyptoaOlll'1ll111cations. 

(2) That, in contrast t.o the to~ing situation, lll8SS~f?88 

enciphered by a machine whteh was invented bT a foreign enginoor Ard 

vbioh was adopted by the u.s. !med Forces were found to be eolvable 

and were trequ.ent]Jr solved by the Germ~~ an and Japanese ceypt- anat,ytic etaf'f'e. This m.achi.m bore the tion u.s .. Army Con... 

verter M-20'). Further data concerning it vlll be set forth in para .... grtlph 8d below. - b. (l) In eubstant.J.at4on or the statement made in paragraph 

8a(1j(a) above, it is necessary merely to refer to tho Report o!'~ tile 

IOint C\X!lr.d.tteo CM the Investigation of tho Pearl tJarbor Attac..1!._, 

3 Senato Document 'loct 2441 19th Congress, 2d Session. 
~J..e Cb&JID<:ey W • Reed 

!bat I~ 1• replete vith 1nf'anat1on oa tho IN'bJect or the llO•called 

".llP.g1c1 the aover :aame then Slft'loyed tor Co11man1catiana lute~, 

<that is, s.ntel Usence produced by intercept!iii 8iiii :reaalns eDl!li4.Y' comnamice.tiona ~ tol.l.oV'i.ng statementa, vhich swear on pqes 179 &Dd 232 

Of the J.\e.port vill be at int~t I 

11W1t.b tbe exercise ot the greatest jzraen:u1t¥ 8ZJd utmost ruourceMneoe,, regarded by tbe caamdttee u meritiDS the hScbe•t co:nmvtation, tbe War am. •vy Jlepartlmlte collaborated 1n b:realdl>8 t.be 

.Japanese Codee. 1'brough the a.ploi tat1on ot intercepted and decoded *'884Je" 'between Japan and her cSipl amatic atabli llhme:Dts, the 90 .. 

aalled. Magi~, a vea.l.th or J.nteJ.ligence ccmcern1n8 tbe purposes ot 

the ~ was available 1D W.Sh!Dgton - - n (Pase --- ----179) ---~ 

tbe 

(2) or particular s1gnif'1cance 1n th1a coanectioc 1e the teet1 ... -~f\Y of deDaral George c. Jlar8be.ll. 'bei"Ol'e the Joint CoJlgreeaiaDeJ. caa ... m1ttee at t.he ~n aeaa1on on Decedler 7, 1945. bot teatintJn.y 

:.IJnrolved. tl\e 41.aclosuTe of the contents ot a letter which General 

llarahell wote to Oove:mor Dewey on the 25th (and on the 27th) ~ 

September 1944. A qy of that letter, which epp<!arS on pages ll28-P9 

of' Part 3 ot the BevI.nes bef'o:re the Joint Comit~ .. is iD.clud.ed bera .. ?nclosure 2. 

(3) 'lbe •1.gn1t'1cance of the statement (Dllde 1n paragraph ft:.(l)(a) 

.,Pqvg) 1n oonnectiaJJ. ~t~ t~ mtter 1e obv1.oua; tba cipher scbinea 

~ 'b7 tho Cerwn, ?W.l.1an1 and Japanese Armed Forces proctu.ced. 1199 .. M688 which cQUJ..d ~ and were solved b)" U s. O';pertl 

£· (1) To subatantiate the •tatement -.de in ~h 8!,(l)(b l 

N>ove, it vou.14 be necesear;y to .ubmit data ot a claasificaticm beyo.."ltl 

the.t permiuible 1n this letter. However, eince I am t°orWD.rdUlg tho 

letter through "lfi¥ superior, Lt. Oen. Ralph J. Ca.n1 ne, Dinctor ~ the 

lfat.ioual 8ecw:'1 tf Af1m.CY, 8D'l the Secretary ~ the ArllfiJ, ~ will bave 

the qpportun1 tf to review IRlCh cSa.ta. u 'llllJ3 be pertinent and to aubm1 t 

--lhlch 11lt'ormt10Q ot a elua1t1ed nature aa ~ deem appropriate. 

(2) 1\Wl a1gnif'icance ~ the statement (ma.de 1n paragraph 

E'§.(l)(b) above) 1n connection with W.. letter 1a obviouar the u.s. ~ ~ 'fta ~ to plan BlWl execute with ~ a.ad succesa their ~t-l.evel llti'ategic aDd tactical operation8J the e:1J11DV p.1ned 

i» &d.vance ~9t*@ti<m tbn'eot trom. imtecure C."QPtoc<:llmn;a1ca.uons. In 

~ voi-de1 tbe cipher achinea wsed 'b1 the u.a. A1."me4. rorcea to :pro .. 

teet the voluminous QOUIZl&n1cat1~ 1DY"olvecl 1zt. euch hish-level plaiW 

.mt. O,pel'atiom FO<)w:ed nessagea Which cou.14 mt be tolved b¥ the ~· 

6 .:::oN~~DE7-.:i=iA_4 3 
Honorablo Chauncey w. Raed 

d, (1) To aubeta.'lti.ate the stateroont made in paraeraph 8a(2) above, it again would bo necessary to sumnt data of a classi?ication 

bayond that permiss:lblo in this letter. The data wuld.1 however, 

TIUlke it obviws that t.11e Armed Forces of Gsmaey-, Itnly, and Japan 

pined useful intelligence from their interception and solution of 

messattos eneiphered by neo.."18 ot Col'IV'erter M-.-209 • 

(2) The significance or tlie stateI:ient (•de in paragraph 8a(2) 

at>av9) 1n connection with this letter ia that it artorda a basis tor 

cmtr:ist between the &::1.0unt t.'w inve'ltor ot the Convert.er l'-209 received 

tor his invmtion and tho a.l'f!Ount of the award sought in HtR• U~2. 

The data tor the contrast will now be •et torth, 

9. a. The cipher machine desi~ted as U .s. Army Converter '1-209 18 

a ma.chine-which vas invented arri developed. by a Swedish et\tinoer, Mr. Doris 

C4 'Tl. Hagel.inf of Stockholm. The .AJ!torlcan ~s o.f' Bagel.in• e inventiOl'l 

wcooeded in mtereμting the U 11S. ArrtfS" 1n tho device to the extent that 

d1.lrl.ntt tho ;roars 1941-1943 a total o! 711 929 of them were manu!aot~1 und~ HaJalin'a patents, for the u.s. Artied SerVicea, b;y the L.c. Smith• 

Corona Typewriter Co., Groton.t. Nev Yark. The wtal. cost to the U.S. Government. of t.hese roaohines, incluaina spare parts and inatructian books, vaa 

t8,6l4, 7901122. tho r:tnancial. &rrallu"'S!lent with ~elin' s pro1otera was euch 

that Mr. Hau~ received the foll<nd.DG royalties• 

On the lat 5000 "\l.Chl.."les ('125 ro.;alty on each) ••• 

On the 2nd S000 ma.chinos ( &75 royalty' on each) ••• 

on the 

1625.ooo 

37$,ooo 

MlBJ.ning 61929 machines ( ~25 royaJ.t;r on each) ,... 115481 22$ 

Totals - 71929 machines Tot.al. Roy. _. .. ,"2,S'Ga,225 

'b. However, because ot considerationa invol~ u.s. and Swodiah 

in.cono to.i laws, it turned out that Ha.eel.in sold his u.s. E!tent en Converter \i~20? (u.s. Patent No. 2.1089,603 and i.Llo 'a i"tiiii!t:r=rree license to 

tW m(lre' U._!. patents cov~ a.asociatod apparatue) to the u.s. Gwernm«lt 

tor the SUJll indicated abovel v!z, 1 12,548,225, on which he paid a capital 

pins tax o! apprad.matel.7 ;;700,000. (A straight royalty would have 

:resulted 1n no ta.'I!: to the u.s.., urxier our convention with Swed.ml.) 'i"lus• 

the sale o.t liLJ u.s. patent netted him about ~1,aso,000. m.s rate or 

ttO)'al.i;y was at>pr~teJ.7 30;& (inatead or the m.oro usual '5, 1, or 10;;;) 

booause of the absence or competitive dsrlcesJ ttage11n had a proprietazy product~ covered by hia mm patent.4 

4 Tho average cost to the u.s. or the 7lf929 mac'1ines wus approximato.1¥ 

tl.20.00 per machinoJ the average royal~ to Hagel.in was appra:rlna tol7 

$35.00 per r:iach.ine. 

1 

1 1w~r 10C.Nr.i~iAL. 

--- - - -------------------
QC)~ IU~ir'~ 1~ ·'-

/ 

c. If' tM invo.'lti.ons 1isW in 1I.R. 1!52 bad not been pl.aced 

in aec."'4fJ<Jy1 patent appl:i.cat.ions therooil could have bom filed 1n eevenl 

foreitm countl.1.es at".d ~ invontl.0113 axploited, It is possible that the 

e 

"'-I~ ~k? ~!-§:f',~·-1-PAL 

-- - - - -- ~- ----------------------------
REF ID:A71827 

CONFiOr=:NTlAL 

Honorable Chauncey w. Reed 

British Gov-ernment would have purcheed or would have had manu.f actured 

for British uae about 121000 to 151 000 of these l!lach1.nes. This is the 

total n.ur.tber o.£ cipher machines they manufactured tor use in World W~ 

I!, Machines that represented merely a l"lodification of s. wll-known German 

e1pher mac'lrl.ne.5 Since the average cost of one o:t the SIGA.BA/EOM was then 

about $2,000,. the cost of 12,000 of tb.er.i would have been $24,ooo,ooo. A 

very modest royalty of 5% would have brought the :inventor ~1,200,000J a 

ito-yalty e.ppro.,..-1.mat~ that which Hagel.in received on Converter M-209 (30%) 

11ould have brcught $71 2001000. But if' one ccnntere by saying that there 

is nothing in the record to prove th.at the British would have baught or 

manu.t'actured a large rrur:IDer of SIG.ABA/E.CM machines, or an;,vth:tng like 12,ooo 

or theill,t then at least this m~h 1e certain. they might wll have used 

about 61 000 of then to meat their needs for Combined {u.s.-u.K.) eacmunications. On the basis 0£ tPat :Mal1Y machines, the total rnutber ot ma.chines 

would sti.11 ha.Ve broo.ght a very handsome royalty. 'the total World War II 

expenditures or t.ria u.s. for the machines am. devices Made under the inventions listed in H .. R. 1152 exceeded $.3010001 000.00. Thie fact ia cited only 

to corroborate the s~tementa l'lad.e with regaro to the probable size or the 

foreign market. 

U., All my inventions in the crypto;;ra.phie .field could have bem pro .. teeted by patents in foreign countries. But in VJ.av ot the impos:ttion ot 

secl"ec;y on those inventions subsequent to 1933 and on t.h.e u.s. patent applications thereonf it was and still is not possible to app~ for patent protection in foreign countries. It is certain that had I been free to exploit 

the foreign rights to several of m:f' inventions,, I would have had an excellent 

opportunity to eell those rights to foreign governments,, especially the 

British, and to foreign manufacturers, especially to Mr. Hagelin .. the leading COITlrull'Cial :manufacturer or crypto-equiprilent 1n the world. In ad.di tion 

to Mr. Hagel.in• a firm, th.ere are or 't1erc before World War II several ma.rru.-

racturers or com.unications equipment vro could probably have been interested 

in the comercial potentialitiee of eecurityr equip'lent based upon my irrventiona, not only tor the European but also for the international '"laI'ket. 

12. a. The t11.10 precedi.'1g paragraphs deal with the SIGABA/EcM. Similar 

data perta':i.mne: to several 0th.er ot my in"Ventions in t"w ceypto-cquipient 

field could here be oited1 too, but because I think suffieient information 

has already been :f'urnished to establish the fact t..'1.et the potential valna 

5 lncidentall.y1 it rtay be of interest t.o note that a royal c CJll!lieeion 

awa.t'ded Air Canodore Frank WhittJ.e l:.-1001 000 (-o403,.000) tax-free, 

.tor his work in developing jet engines, eve'l though WhitUe'"was s~i­ fieally 889~ to research and invention. (Seearticle tiy e!a,pt• George u. R l!l.I'd1 t'!llt, lllre we stm:Iriii the inventors?," satu.rcla¥ 

Evening Post. 9 June 1951.) Only recently Sir Robert Watson~Jatt was 

awarded£ 501000 by a royal co"r:J.iseion !or hie inventions and develop .. ments in radar apparatus. 

~ 

J 

- _ __J 
REF ID:A71827 

CONFIDENTIAL 

Ronorabl., Chauocoyw. Reed 

ot the .toridgn rights o.r but ono ot 'Jfl3' ilm3ntiooo far mmeeds t.he enou.nt 

or the award sought in F.R. ll52, I will crd.t such s:L~ ad.W..tional data • 

.xeept as to the i'fli'ol"JXll!tion gtven in subp.nl"agraphs b-e below. - ltt The u.s. Torsion or the 11CC''11" the Ccxnbinod Cipbor !-!&chine, 

used for 1ii terccmuunicatd.on ld th tho Br1 tish1 was !'urnisljoo tho U ·'. 1n 

cono quantity, 'l'he stepping of the a:cypto-clrrients ot this machine is 

acoo:mpllshOO. electrically aad this £ea.tu.re o! cipher l'lllchinea is covered 

by one ot llV U,.c;. Patcalt Appl:!.rations l.isted in H.R. 115'2. 

e. Tl)s British were furnished a limited nurnbar of u.s. mohine:l 

for eooipncring teletypo transmissions. The cryptopi-1.nciplen used in these 

machines, desienated iv the ehort title SIOCIDf1 were based upon mother ot 

my u.s. Patent Applieations listed in H.R, 1152. 

is:. Practically all u.s. Allies wero .furnished tho u.s. cipher ~.....ces kliow as t.he Strip Cipher Dev.tco,. cavared bf rq u.s, Patent ?«J. 

2,3951 8631 also I:l.Clltioned 1n R.R. 1.152. This one, ··hi.eh was held in secrecy 

tor at lee.st six years, vas .f'1naUy allowed w issue in 1946 • 

.t• The info~tion given in 11-bpnr~rar>hs !!, !:I and ,S above will 

assist in rorrung t-J'l.s conclusion that the ··m.rkot for the tol"Oign ~ts to 

'l!fl inventions would have been important i.f I could have exploited those 

rlghts bctore or during World War II. 

]J, a., We cmo 'lOW to the potentialities o.t t'1e exploitation ot the 

donastic ccm:ie:rc1al rights to the 1xwei1.tions listed 1n H,'t. U$'2, 

'b1 'L11th roterence to the eO?IJ!lerc:tal use in this country of privacy 

en" sec.racy syst~ far the protect.ion of written ec;;;.rllltleationa, it should 

be noted that sevor.:U. u.s. corporations,. in partJ.eular1 the International 

Tolophcna and. 'l'ol.egraph Co.,. the International Business Ha.chines Corporation, 

the A.l'\f>rlcBP Telephone and Tele~ph Co., l'Od tho Aut<X'Ultic FJ.ectric co., have 

epent considercllle sums of 'flJDney in their endeavors to devise, develop, or 

porcl:iaeo u.s. right3 tor cipher tW.Chines.. 0 7if0Ver, qua1.ifiad crryptologio 

pid.en;:e was not av~ilable to those conpr.uu.es because export knor 1ledge in 

this i'ield is coni'i."'led al.J®st exclusively to Government personael; there.tore, 

the etforl..'l ot these canpa.'ltee wero largel.3" unpro!'it.able, Hovaver1 it ia 

probable "that a secmre1 e.t'ficimt, am auton.'\tic d.pbor attachment tor tele--

ty'pa trnns:rl.ssions would fill a lone-sta.11d.ing 'l&Cd of large corporations far 

prl.vaoy or secrecy in that ca~ocy o.t ccn:i.u.11.1.cations. In f'.oot1 on tvo 

occasions approachea wero l'!Ulde to m on behalf or one or the COI?lpanies named 

abovef in conri.ection with the possible ,Purol'iaae of the conneroial r.tghts to 

ono o!' ~o inva1rt1ons cited in H.R. 1152, viz~., u,c;. Patent Application No. 

4431.320. Tbis application has been in a e~rocy &tat!J.S sinca l6 May 1942. 

'rha first occasion on which I was approac,.,e<l by an officer or at lee.st a 

high-levol o.fficial 0£ a u.~. conipany interested in the machine covered by 

---
REF ID:A71827 

Honorable Ohaunceyw., Reed 

u .. s. Pa~t Applleation Ho,. 320 vas dur:1.ne tho tim.e when the machine wa.a 

being prcduced in quantity by ll1.a C0'"1p8.Vi. 1n 1942, I was, ot course, 

Ul'labie .ven to diSC"tlSs the wbjeot airee tho inventl.on had bean pl.aced in 

•eorecy and I 11eroly indicnted that neeotintions relative to a license cca.ild por~aaps bo initi8icd after the var was (ftfer. The aecond ocoaeion on vhi.ch l 

van appronehed with reference to tho ca:n:trcial exploitation ot u.s. Patent 

.lpplice.tion No. 443i3201 W8$ 1n Sep~or 1945, when Major General Prank .s. 

stoner1 USA1 Aesistmit chief Signal otficer, adviaed • that the com:rterd..al 

eorr..run1cat1ona co~aniea were interosted in acquiring a licenee to use the 

invention covered b;y Application Ho. 4431320, and S\lgge&tod that I get that 

application :roleased frm secrooy, The official nJCorda in the caae vU1. 

ahou that m;y atr~ to have that application released bei;;an on 27 Septe::ibar 

194?1 fa.terned until 20 !fovt!l"lbor l.9471 ard wre unsuceessM. The case is 

•till in eeore¢7. 

b. Thora mists in the u.s. a •rket for the so-called literal 

cipher dsV:tcos ar cr,ypto-equip!lents fat; business office use other than u 

indicated above, but the extent of the tUrlcet is dil'.ticul t to gauge. Soon 

after the close or hostilities in World War II a l.imi.ted number of copies 

ot the u.s .. Arr.:ry cipher machi."le reterred to in paraaraph 8a(2) above 

(Converter K-209) came, b;r inadvertence or disregard o.r r8iulations1 to ba 

pleced upon the market as u.s. Arrq- wrplus equip-leXltJ they ~uickl.T f'aa.nd 

purchasers. 'fhis substantiates in e=> d.et:roo tho surmise on the part ot 

tho companies cited in aubpara.,.<'11'aph a above that there is a market tor cipher 

apparabl.s tor cott:10rciAl. usage. Nei0x•t1'ieloss, it ia true that, by and large, 

u.s. firms doing an international business and e:iga...,~ in oversoes comnunt.-

oaUons use business codes and that their use ot them is ccmnmicy' dictated 

&a lftl.l01'i by" econ~ co!'J.Sidorations as aecurl~. However, aa General Canine 

bas alrea..ly r6'llll'ked1 "it cannot ba said th.at /J.n. th1a courrtrj/ a market 

tor h:!gh-srade ciphorlng uchines could not bavu beEn developed." It is lD1' 

beliet t.l-iat a 111ar'{ot could be devatoped for a ~-~ tzu.twrt.~ and 

af'f1oimt machine. •' '· • • - -- ' --

14,. •• Tho tol.lOtdng extract fr= Seorat.ar,y St.evens r letter, quoted in paragrA!)h 2!, above, ldll. now- be em::dned 1 

"••• To detu' an i.i"'lVentor the right to eeok gain from hie 

inventions sorely bocn1ise thq are 'Vi.W to our national daf'ense 

and the seour!t-i}" o! the Oovern.ilent, whila oen:d.tt~ such ~suit 

pz inventors in other fields wtere a~ 1riter8itS are liO · ~'10\lnt, W6ill<J "'be arsci=r.'ldriilto~ wd 'drecaurae'e i<FiiiiCe-i.ont 

matters vna:t to our n.e.'S:Oiiai- ense t n {Frtphasis supplied.) 

b* Al though mmerou.a instances could bo ci tod vl:erein punrui t b;r 

GOV'CX"nm~nt: invei itora of their ca:inercial rights in tha.1.r inventions has 

)1.olded substantial fina.'lOial banof'1.ts, only three cases 'Will be cited herein 

to illuatrato tho nntura and poosible extent ot tho diacrimination t.o which 

illusion is made in the Secrotaryta letterr 

(l) In tha Report and Reem iendations of the Attorney Oeneral 

to the Presidont on the Investigation oJ: <Jovernl:lont Pat.ant Practices 

f~- --ic ---,,. :"' ::"'ll 

• t. 1-r 0~--;*' f1 IAL 
Bonorable Chauncey W'. Reed 

and Policies, eubmitted. in 19471 an:J.1 spocii'ic~, in Volune n 

thereat, dealing with the ''Navy Monograph," page 2701 there eppoars 

the roll<T.dng paragraph1 

"The rolationshlp betwoen nwal. aiplorees and private 

industry resvl.tir"Jg tro.-n the interest in •~ tho former• a 

inventions was, on at least one occasion,. suwlenented by an 

even closer business connection betwoon thm. '!'hat case involved 

an outs~menber ot the .IN'a-val Rosearc'![! Laboratory et.at~, 

Dr. lfrarve1. Cif Hqes1 of the-Sourd Division, who had been act.tng 

u a consultant !or Texaco and was un:lfll" contract !or ~ara to 

aes!gn all or his patents to that eor.zpaIJ¥1 alle3odl.¥ at ccapensation of' $251000 per year., In 19.37 the Department made an ef'.f'ort 

to prohibit conf'licting outside e-iploym., ... nt1• wtie:eupon Dr. Hayes 

ottered to resign if he wero obliged tn re.u.nquieh his Texaco 

contract. Upo"l submission of the matter to the Judse Mvocate 

General it ws decided that ha could retain his conneetion with 

T.xaco while continuing in the Nav;r Deparbnent." 

(2) In the 811i.1S Ret><>rt. (ment.ionod um~ subparagraph (1) above), 

-arxt spe.oi.fic~ uider t"e aeotion devoted to tb.l ttwar Monograph, n 

p.a&0 4501 thero appears the .t'oU~a 

t•.In acne instances substai."1.tial sum.s have bom reallaed by 

War Departnent. person1el fron their inventiona, an e:xample being 

in tho Air Forces. "lrtt Weldon wort.ti, a civilian fJqJJ.ayee at 

Wright Field laboratories baa JDade a number o.t inventtons, one 

rel.ati11g to an oil dilution eystEn tor airplanes. Thia syal:ii 

hu been used by the Ill'i tiah Governmcn t in the recent war and, ~uant to the pa.tent inte.rchanc;e aereetent between the tvo 

cou.ntriee, that Government requested the United States to obtain 

for it a license Ul'lder Worth's British patent on the eystan. By 

the ~ of t}]e patent intcrchanze aereament, the United States 

would bear the cost 0£ procuring such a license. Tho Air Farces 

.ntel;'Od i..'1to negotiations wit'1 Worth, vb> ottered t.o grant a 

license tor an annual .fee o{J;proximate~oo,ooo. The nego- tiating "ol'?!Cir ccnsidared tOo @ih ne;;otlations were 

8U8Pended• Duri.."'lg the course or the negotiations, Uortb sulrrl.tted 

Wormtion which indicated that he vas X'f:!C~ ~o.x:f.maifl 

~000 a~ f'rcm licenses under hIS Cana ,e t8 on ~ont!on ~ilf:stlon." (§iipliiii!s suppnea.) · · 

(.3) Dospite a long-standing and quite restricttve policy maintainod by tre National Dul"oau or StalXlarde with respect to rights in 

inventions mdo by its e::ipl.oyaes, tho Bureau has never withheld .f'oraign 

rlghto trait enployoe-inventors. "Tho Bureau as a J'l.Ultter ot practice 

12 

.. -
r 

REF ID:A71827 

t;OMf:IOENTll-;e:; 

I 

Honorable Chauncey w. Reed 

has P'C".mittcd ite 9'1ployl)es to retairi tho .to~an patent rights even 

to 1.nvontions as to which tho domet.1.c patent rights are tD be a:Jsigned 

to the OOVCI""1ilellt. 11 (Report cited above, page 99.) One ot JitY' f'riends 

'lho is a Bureau of Ste.nd.a.rds enplO)"t'Je-ime 1tor, Mr. Jacob Rabinow1 .tulJ¥ aware that I was pl..a?'_.nint; to use his ini"ormation 1n thie letter, 

told mo on 10 Set>teraber 1953 t."mt he recent:Qr sold his foreign rights 

1n two or bis imentions am that t..'iey brought him a total ot $130,.()')(). 

/ 

o. Attention 1s e~ielly invited tD the pert:i.naa.y of the second 

an:l t.hird"i.Uustrat1011s cited above as to tho value o.r toioeign rights, 

booauae it is in that area that secrecy requirements dictated by the needs 

ct our nattonnl dei"o11Se have =oat seriously 1mpaired1 if not cor.tpletacy 

nullitied, my p.ropcrtJ rights in 1rfl' invo:-itians,. right.s granted r;ie man;y yoars 

~by a properll"-amp°"-"BI"ed Patmts Board (of the Signal Corpe) having jurist.ion in tho determination of what rights inhered in tho GO'lerment arxl 

in the inVontor, respect.ivoly. 

I ~ 

J.5. a. n"'9 last paragraph of Incloaure l calls for com1011t. That par~h-1s as foUomu 

"Tho Bureau or t.'19 Budget advises that while there is no ci>jectlon to tho subrlission of this report, it is believed that there is 

a aerlous q;u.estion as to tho desirahility or uk1.ng th& proposed award 

in 'View or the ract that it is inconsistent with genernl adrrl.nistrative 

end statutory policie:1 rcl.atin; to invantlims made by Federal. e:n.plo~s 

in the course o! their emploYl'10llt with the use of Govornncnt mater1als 

md. with tho aid oJ: other employees." 

b. fhe basis tor the statement that the proposed award "is incontdstant "°;rth general administrative and statutory pollcios :ml.at.in~ to 

invontlons ••'I" is >'lot~~. In .taot., I e:!1 quite eure that the sta.te-nnt 

ia not petinent in respect to the award ~t in H.R. ll.52. 

d. It by "Adrdnistrative ... pol:foiestt the Bureau of the Budget 

X°'Gfors to""'EJtecutive Order 10096 ot Jenuery 23. 1950• then I wish to paint 

CJUtt 

_ (1) That the a.aJ.d order applies onlJ to inventions "l8de °b'J a 

GovOl"nr.lOnt EOployeo on or artor the de.~ ~~~ _( ~~ 2), 1950) J 

(2) tl:.at tt o rnve.'ltions listed in H.R. ll52 were made m.aey 

Yeax's baf'aro that dateJ 

j I 
( 

) 

\ 

REF ID:A71827 

C(')NFID!2:t'~~ I eAL; 

Honorable Ch».uncey W. Reed 

(3) tliat even u.nier :gxecutive "Jrder lOO:i6 tho foreign righ~ 

in inventions Jl18d.e by 'Jovernment OIJi)1o.tees inhere in the inventorsJ 

lltlt 

(4) that the sole baa1.B for the award sought 1n l'hlt. 1152 

U thQ fact that oecurity considerations required that tho inventions 

llite-I ~r~in bo l'"..ept \lMer seal Of secrooy, and as • result I vas 

'Wlab1e to aploi t iv property rights there1ni especially 'IIfl' foreign 

t'iahts. 

~ - - L ~ !l_!-_ - ~ .:=...2!:._;:_ - ~ --

$. lJ'ith X"e1;ard to "statut:iry pollciea" with which the award 

r 

• \ 

~ 

:might be considered to be imanaistent, this po:Jsibly- re!era to th.e 

t'ollo~ extract tram Section ) of 3S u .. ~.c. ltn-100 (c~ Public 

Law 2'61 82d Co~r>Tess, the "Invention Secrecy Act of' l9Sl")t 

ff'l'hLJ section shall not ~ovirer ~ ~ght of ~tiQI! on ~m 

or hie successors, assigns, or legal. rop:ream.tatives who,, while in 

the .tu.11 ... ti."'le f!!!llPJ.OY1"lent or sern.ce Qf the United stateA1 &covered, 

invented, or developed t.J'l..e invention on whicti the claim is baaed." 

!j> In respect to the foregoing extract, I wish to point outs 

(l) That the relie.t sought in H.R. ll52 is not i.11 tho mture 

of a settJ.t9"lont ot a al.aim based upon considerations involving the 

~ statua of r,tpte !ri t.i.a 1nvU'lt1.ons lleted therein; 

(2) That the inventions listed in H .. R. llS21 with one exception17 were not placed in secrec,Y urrier the provisions or the abovement1o'1ed 3S u .. s.c. 181-1813 until 20 Hay 1947.. Therefore, those 

pt'O"deions of law were not applicable to th.$ invEntions listed in 

the H.R. 1152J heme no cl.a.:1m based upon such le~al issues as my 

a:!.lst in tho case could Ee filed in aiv- eve~tJ 

(3) '?hat the Seeretarj of tha Army took into consideration 

tho provi.8ions or tho law cited in the nrecodiqJ; subparagraph when 

he statedr 

6 See Section 6, Adtl.'1.istrative Order No. 5, dated April 26• 195l., issued 

b)" the Cha1.rmnnt aove%'l:r.lant Patents Board. Also, note in this connection 

paragi-aph l.4b(J; of this letter. - 1 tho exception irvolved Patent Appl.i.cnt:bn No. 3001 212 .. lth.1Ph was placed 

1n secrecy on 16 July 1940, under t..tio provisions or the then Public:: Law 

700 76th Oongre.os. The appllcad..on ws released from secrecy after 

VQT'ht War ll end f1.nally issued, on 5 Marc'1 1/461 aa U.S. Patent ?lo. 

2,395,863. 

14 

t..-:f·lr~FIDE~{TIAL -- ---- -----
!!........................... !________________ 

......... 

BoPorabl.e Cbe.nncey V. Jleed 

"Xt 18 believed that thero a uo lav vbich provided. tar 

Jlr. Jioiednan'a 1'9drea9, Hit bas DO~~ under 35 U.8.C. 

l.Bl-188 (co4ifyix1.g Public l&v 2561 82d. Congress, the 'Invention 

leoreey Act ot 1951"), that l.av excl.ud1Dg tl"Olll its benefits 

~ Who vas a tull-ttJJe Government tlq\loyee when he made the 

invention in ~stion. Section 10 ot lublic Iav !56, 82d ~sa 

repealed. :Pu.bl:te tav 700, 76th Congress (35 U.S., 1946 ed., 42) 

but :preserved ~ rights then existing Ullder tbe latter act. 

Iiow'ever, tb.ia ~ to afford. no lep1 remedy tar Mr. Priedman, 

11nce Public law 700, 76th Congress, required. a cla1•nt to have 

a patent iasued. 1.WOll an application which vaa in eecreey and tend.e:red to the Government under the provisicms of' that statute. 

Likewise, 28 US c. 1498, relat1ng to :recovery ror patent in:rr1.rce ... .ant by the OovenJment, tails to provide Mr. tried.nan arq lJJpl 

ftm'l~ 1 ainca the Oovernmant bo.8 e:t lea.at a royalty-tree license 

to uae the Prie&:ml inventiona;" 

(4) That the vo.y in which JQ" invantiona were kept in a aecreey 

ste.tus :t'rom 1933 to 1947 w.s by means o~ 35 t1 S C (1946) ed ) Section 

311 tho ao-ce.lled 11 thrce-1ee.r l'Ule" which ru.1s could be invoked. 

~eatcd'.cy' on the same patent an_lieation eo that the invention could 

be kept 1n a aecrecy at&tua tar an ~ini te number Of )"E!8l'i;-u-w.a ~ in the oue ot all the inventions listed. in B .it. lJ.52, vi th one ~tion (see !tote 7h and, f1nal.1¥, 

(5) 1'bat the "tbree·yea.r rule" conta1Ded no p:roviaion wbatso .. 

~ 

ever tCJr oonweJl88.t1ng an imentor t~ vithhoJd1ng or in4et:ln1~ 

iesuance ot a pa.tent. 

I.:.. For the foregoiJJg rea.aona it is dittiau.lt to aee the valid.1ty 

at the p~!1i1on taken bl the_~ ot ~ ~~ in reg8;!"d !o ~·~~μ~I 

there ta natb.ine 11'1 that bill which ia 1nconsi1tent vliJi ~ a4m1ni11-

trativo and statut,or.y policies pe:rtaining to the case. 

16. When permiuion vu gl'anted ma to qloy couwsel to aaaiat m 

in the pre.pare.ti.on or the case it ,.. ot'f'icial.1¥ stated that there vu no 

ObJeetion to JD.}' 0hir1Dg private caun.sel provided DO claaali'ied 1.uf'arma.tion 

u revealed. there1:Jf." X have ~ adhered to this coud.ition and vUl 

•tate without qualltication tn.t IG" counsel baa mt partic:ipted. or uaisted 

1*t in any w.y- in the preparatfon of this letter. Bence, &11¥ im&!equa.ciea, 

aeiguities, ar errors or lav therein are rq 80le rupanaibiliv 

.:::1119 

-

....._ -- -
REF ID:A71827 

17. lt 18 "If:/ hope that e.tter revicrw1Dg all tea as.ta an!. nal.uating 

all the cona14eratians :tnvolved, ywr Comittee wUl conclude that the 

*'1DCiWit ot t.he avard. aousht 1n lt.lt. 1152 1a not a:ceaabe u4 11111 reouentl 

Pldt~ th<: i'ul.l aa:nmt rent1CIY.Xi thi.n'eizi. 1'ha.t UIDUDt wul4 JQ"OV14e, .. I think thB t'acts presented ill this letter auppart, a yery ll.ICl4ea\ rec06111-

tion or the value or the f'arctsn rig.'lts and tho Aoa:Jtia cwwwrc1.eJ.. rights 

'Mhich l am unable to aploit beca.uac at MCJ.c1ty cc:maiderationa. I=Jeed, 

:t teel that the aa:R.Ult 8QU6ht in B.P.. U~ d.oea DOt to ~ aub&tantial 

degreo retlect the real val.us ot thoae rigb:ta. 

Vt!ey respeet.t".zll¥, 

--~ 

-
• - ... ,. .... I" ' 

•• ,#. 

REF ID:A71827 -----.--~~~~~~-.-~~~~~~~~~~~~--. 

MEMO ROUTING SLIP Nnrt:,::i::::C~t:~~~~';!;'::SALS, 

I NAME OR TITI.E INITIALS 

ORliWllZATION AllD LOCATION DATE 

.2 

a 

4 

c~~ ~ .fl·~k 

DD FORM 95 Repla.amD.A..A.00ll'mmSll&.1.A.pr411,llDCl.A.Jl'B.Q I IEB 00 .I'-U, 10 .Nov t7, wbloh 11111,J' Iii mid. 

DATE 

CIRCULATE 

COORDINATION 

FILE 

INFORMATION 

NECESSARY 

ACJ'ION 

NOTE AND 

RETURN 

SEE ME 

SIGINATURE 
I NAME OR Tln.E 

·=- .;.-~.,.: -· ----:'- ~--.. ~ - - ...... --;F .... 

ORGANIZATION AND LOCATION 

2 

3 

4 

........ .. .r>"·:·:. 

OMAHIZATIOlt AND LOCATIOlt 

INITIALS 

DATE -

1--~-1 

ClllCULATE 

CXIORDINATIOll 

FILE 

INFORMATION 

NECESSARY 

ACTION 

NOT'E AND 

REtURN 

SEE ME 

SIGNATURE 

TELEPHONE 
1 MEMO ROUTING ~ .... I NAME OR Tl11.E 

. , .. _, ..... 

4 

PROYA£S, DISAPPROY .4LS. 

WiiCiiiiiCANCAS, OR SIMILAR ACTIONS 

INITIALS 

DATE CQOROINATION 

FILE 

INFORMATION 

NEJ:El!IARY 

ACl'JON 

HOl'E: AND REnJRN 

SEE ME 

SIGNATURE 

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