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CSGAS 96 (Rev. 1'l) 16 Apr 47 47938 
I 

REF ID·A104692 . MEMO ROUTING SLIP , NAME OR TITLE INITIALS 

Mr- Friedman CIRCULATE 

ORGANIZATION AND LOCATION DATE 

CONCURRENCE 

2 FILE 

INFORMATION 

3 ~ NECESSARY 

ACTION 

NOTE AND • .. . RETURN 

4 SEE ME 

SIGNATURE 

REMARKS . In response to an inquiry made with respect to 

the uso.by other techn~cal services of pseudo contract 1 

siinilar to the Signal Corps Patent Memo, set forth be• 

low are the names of those who were contacted tor information, together w,ith their comments. 

1£1 Gallehe' (Office of the Jud1Ze Advocate General)1 .L • 

After checking into the matter and discussion 

with Mr. Glassman, Legal Division, Office of the Chiej 

Signal Officer, he was of the opinion that no other 

technical service with.ill the Department of the AI'm1' 

used such a contract. · . 

Mr· Saragovitz (Legal Division, OCSIGO)a 

To his knowledge, the Signal Corps was the o~ 

technical service within the Department of the Army 

utilizing such a contract, and the latter, in vie'1 0£ 

the recent decision in the.Kober case, was valid. 

FROM NAME OR TITLE 

I. Passa ORGANIZATION AND LOCATION 

Patents Section, R & D Division 

Boplaccs WD A 00 Form 89li, 1 J"un 48, 

which ma:v be usod. 

2j Feb 49 TELEPHONE 

227 
REF ID:A104692 

Mr· Glassman {Legal Division, OCSIOO) :' 

Based upon the ·i.n,formation contained in the 

Department of Justice 'Publication (which in bis opinion 

is 9.uite accurate since the basic .~ormation upon which 

the report was prepared was submitted bi the technical 

services and was reviewed by the latter for correction 

before publication), ·supplemented by discussions in the 

past with other agencies, he did not believe any other 

technical service within the Department of the Al'2l\Y 

used such a contract. . 

Mr, Koontz (Air Force): 4 

To his knowledge, the Air Force does not utilize 

this type of a contract, · 

Dr. Hares (Navla 

The Navy uses no such contract with its regular 

emplo1ees. 

I. PASSA 

Patents Section, AS-71 

2 
REF ID:A104692 

MEMO ROUTING SLIP 

1 NAME OR Tlll.E INITIALS 

Mr. Friedman CIRCULA'IE 

ORGANIZATION AND LOCATION DATE 

CONCURRENCE 

2 FILE 

INFORMATION 

3 NECESSARY 

ACTION 

NOTE AND 

.. RETURN 

4 SEE ME 

SIGNATURE 

REMARKS 

This Department of Justice publication, together 

with the decision in the Kober case (wherein is set 

forth the opinion 0£ the Court as to the validity o£ 

the Signal Corp Patent Memo), will, no doubt, fully 

answer your question. 

(Note: Pages 22 and 23) 

,I 

FROM NAME OR Tl~ DATE 

"/?.;~ ~ 17 Feb 49 ORGANIZATION AND LCJdTION TELEPHONE 

Patents Section. R & D Div (AS-71) 227 

DA AllO FORM 895 lleplaocsWDAGOForm896,1J'un48, I OCT 41 which may be used. lfJ--411487-11 •PO 
.. -.. REF ID:A104692 

• 

W'AR D;E:PARTMENT 

\1ASHINGTON 

Z7 Janu,ary 1947 

The President 

The White House 

Dear i:.fr. President: 

This lotter is to express the views of the 1iar Department with · respect to the.Final Report made to you by t~e Attorney General, dated 

October 9, 1946, recommending a uniform patent policy for all govermnent 

agencies. The War Department has not seen this Report, but the Attorney 

General submitted under date of December 6, 1946 a summary of the contents of the Repor~. 

You are fully aware of the absolute necessity f~r an adequate 

research and development proJram to meet the national defense needs 

of the United States. Such a proJram will naturally result in many 

nmv inventions some of which 'Will have cornii1orcial application. The 

obvious purpose of tlle patent policies rocommonded by the Attorney 

G0noral is to assure full and free use of such inventions vlhon made 

by Government cmployoos or contractors. I reali~o tho desirability 

of a uniform policy that will accomplis~ th.i.s :r·csult. Hmrovcr, aftor 

careful study and consideration, I am satisfied that adoption of tho 

recomm.<.;ndations_would wrack the liar Depart:ncnt 1s research and dcveloPment program. 

On August 14, 1945, th.:: Assistant Attorney Gonl.;ral submitted a 

similar plan for tho consideration of the.: 1iar .Uc.:parttnont. In my 

reply of September 24, 1945, copy of which is incloscd, I pointed 

out at somo length the reasons why I "\"f"d.S satisfiud that plan would 

not work. I:n a l1.;tt1.Jr of Nov~mbor 2, 1945, copy of nhich is also 

inclosod, Dr. Vanncvar Bush, Director of tho Office of Scientific 

Research and Development, oxprcssc...d his concurrence in my views. 

Thu cxp.::rioncc of the ~iar Dopartmont since VJ-IJa.y in attempting.to 

placo research and dcvolopmcnt contracts has scrvod to strengthen 

my former vi0ws. 

Thu facilities of thu Govornment and of private or6anizations 

01-i..;agod solC;ly in research ar.:i wholly inadequate:; to meet thu needs of 

the i/ar and Navy Departnwnts. Tlic cost of a.cquirin~ a.doquatu fc.cili- ti~s and staffing th~m with quali1"'i~d personnel \"TOuld b ...... prohibitive. 
.. ---------------------~~---------- ----

e REF ID:A10469. 

Consequently, \VO must depend upon industry for a lar J'-' and import::mt 

part of our proJram. Industrial concerns havo cxhibiti.;J uxtromc 

roluctancQ to ontor into research and development contracts under 

present policios·:wlti.ch arc considered by thelil as unduly favorable to 

tho Government: The adoption of an arbitrary pb1icy would r:iak1.. it . 

'impossiblu to carry out our research and·pevcloprJcnt procir~m. 

. The exception provided in tho Attorney Gi:..ncral 1 s plan \muld ~c 

slow· and cumbersome and would not overcome thi.; objections of industry. 

Moreover, final authority t~ determine whether a \/ar Dc,)a.rtlil..:nt contract cpuld be made would be placed in thn hands of' the proposed 

Patc:r;i..t A:<Jmini~trator 1 a Go':l"ernmcnt offi'ci:il who would h~vc no r.::sponsibility ~or·~hu 11.'.ltionn.l. dc~onse •. 

However' to "comply as . far as prc.cticnblu vd. th th1.. spirit of thi.; 

Attorncy~Gcnoral' s rocomrncndations, tlw \far D0partmu11t w"ill (;ndcavor to 

obtain title to inventions ma.de in tlli; performance of rosec.rch ::ind 

' development contrc.cts "VThcn fuc.sibl1.: and provided th1.. c.dd..i. tional cm~t 

therefor is not unreasona.bl:...:. It is be;lieved thc.t o.~rccr.10nts of this 

type can bl.l o.r:ta.nged with contra.ctors viho hc.vo no cor.111417c;ia.1 pntcnt 

position toJOO:inta.in, such as ud~cational institutions ~f'ld org~niz~tions 

whose main business is research and develqpment. I am causinJ instructions_ to ~his effect to bo issued to the procurement services. 

. . Th~ Oovernment Patent Administration, as proposed by the ~ttorney 

General, is unsatisfactory to the Uar Depart1.1cmt. Notwithstandin3 the 

fact that, ?Ccording to· our estimates, the ~-·ar and HaV-..t De~artments file 

95% of all patent applications handled by govern.'1enta1. a..,encies, control 

over 90% of all patents O'\med by the Goverru:1ent, and supply over 95;:; of 

the federa~ funds expended for research and development contractin5, the 

War ~nd Navy Departments are each accorded but one -rep,rc.sc:.rc;ative on. thu 

Gove~rnncnt .Patent Adnli¢1?trati9n. rccor.U'.10ndcd by the Attorney Gcncral,,'as 

against rcprcscntati:vos from ulov.cn oth~;i.~ ·Government aGenci'1..s a11d four 

publ.io groups• While SUC~l a 1Jo.d;y might be . valaablc . :j.n a coordination . and 

advisory capac;i.ty, final adr.1irU,.,stration of patent p0li.ciuS Vi·il:.h. respect 

to contr~ctual matt!Jrs and l..r.1:_.)loycc relations· should be lc.;ft to th•..: executive depar~cnt.s charged nith responsibility thcrc..for~ . . . . . . 

· Incloscd horawith is an opinion of .'Tho Judge Advocate ~kncral '"iihich I\ 

explains the present ·vfar Dcpaz:-tn1qnt practice i:rith:rospcct to inventions 'I 

made by c..mployuca. It also points· out tho necessity for lc'•islation !?Y i { 

t!!.£_-9qngresl? ~~.t ~~le 2~.~£qsc4._.P..ifi.ii:.~~Eto __ ·.~tr06·t:· · Pi my.-1ctturai·-· · \

1 Scptompor 24, 1945, mentioned above, I pointed out,th1.. val11u to th(.) War 

Department ~f. encouraging ing~n:mity on the part of e:mployi.;~s. In my \ 

opinion, ~ho ·hope of financial reward off ors the.. stroI1JCSt inccntivo to \} 

inv~nt. Un1ess a system of cash bonusos or promotions and salary 1 

increases is provided Trhich would subst~ntially rc..placc th .... firw .. ncial 

returns thzi.t might be realized i'ror.i pa.tunt riJhts, th0 inca~1tiv0 to !\ l 

inv.:.nt will be dcstroyc:d and many v.1luabl~ men will be: l .... d to an·l;er 

private ~ploymont rat~or than Government service~ 
. ' ~ 

... 

REF 'ID:A1046ji 

• 

To summarize, I believe it is i.~perative that the ~iar ~apartment be 

free to negotiate contracts for research and develo.t)i;ie11t on ·~he best 

tenns available in order that it can accomplisll its mission of proviai!lt; 

for the national defense and that the maxir.mm efficiency of the '.far 

:P~J?!r~~~ ...Q._~n b~~~- ~e c.?b.tain~d by .al;i.o\ling ~e:~J?~oze_~~ ._to-· :r:~~~~'! ~{~ t~e. to their inventions in-accordance with existing regulations, · ----·- -· _ .. __ -~- - Respectfully yours, 

(Signed) KEi:fffETH C. ROYi\.LL 

3 ll'l-clss Actin~ Secretary of War 

1, Letter of Uar Department dated 

9/24/45 . 

2. Letter of OSRD dated 11/2/45 

3~ Opinion of The JudtiC Advocate General 

dated 1/16/47 

' 
REF ID:A10469. 

c 0 p y 16 January 1947 

HEr.IOHANDUH FOH. TIC. UUD:.tl. SECRET.ti.RY OF -.f.A.R 

SUBJ3CT: Comment on So i.iuch of the ~oposed Government 

Patent ~olicy Recommended ia a H.eport H.endered 

to the .President by the Department of Justice 

as Applies to Government :LJ:nployees. 

The proposed policy recommended by the De~artment of 

Justice to be applied by the ~ifar Dcpartuent in dealing with its 

employees vmo are potential inventors is, substantially, that the 

Government take eomplete title to all inventions and pa.tents made 

by such employees. 

The term "employee" when applied to the .A,rmy inciudes not 

only strictly military personnel such as officorG, warrant officers, 

and enlisted men, totalling around a million, but also approximatoly 

455,010 War Department civilian employees (as of JO N'over.ibcr 1946), 

part of whom work in the War Department at Yvashington, D. c., and th~ 

balance in the Field Service outsidG Uashington,•but all of whom arc, 

for purposes of pay and administration, divided into cigh·t categories; . 

Professional and Subprofe:ssional; Clerical, Administra.tivu and Fiscal; _ 

Custodial, Protective and Crafts. 

~ Since an invention is privatu property, a.s.h~ld by the Su- ~ pr1...'IllO Court in 1890 in Solomons v. Unitod Stat1,,s, 137 u. s. 31~2, 31~6, 

and since; maintained, it cannot bo taken from the ovmvr by tho Gqvcrn:-

ment without compensation ·while.: the.: 5th Admond.'llunt to thu Constittttion 

still stands, in th~ abs0ncc of a contract t0 convey tho Sar.le to the; 

Govurruncnt. 

Therefore, in order to carry out th~ policy propq~od by 

/ 

th~ D~partmcnt of JusticL, it would b~ nccesGary to pl~cc every 

cmploy.:;c of the rlar Dcpartr:u ... 11't (Civil and J;tilitary) undor a contract 

of employment which would providc•that thu employee assign all right,. 

ti tlo and interest in cver.1 inv1.mtion he; may make; uhilc in Govcrn.-nent 

service. ./. 

, 

.. 
REF ID:A104692tt 

Such a procedure, aside from the practical difiiculties 

of operation, such as administration and the in~quality of the 

neiotiating parties, would obviously so antagonize "employeell 

inventors that the probable result ~ould be that any inventions 

they made would be concealed, or taken out for them as patents 

by others out~ide the service. f'_h~g__~al effect would be tQ..... ·\l. 

discourage, rather than encourage, invention. 

I·t is believed that in the matter of inv~ntions the 

present wise and long-standing policy of the Government toward 

its employees should remain undisturbed. That policy is that 

the relation of the Government tovrard them is to be considerod 

the same as that of any corporate or other employer to\.1ard its 

employees (where the common law relation of master and. sc~yant 

has not been modified by contract). 

This policy, as set forth in par. 7, sec. 3, of 

AR 850-50, generally proyides that: 

(a)· In the ~asc of an employee of the '.iar De-:, 

partnient or of the Army who is "specifically designated or employed to invent a specific ~hing and docs 

so at the cxpensq o£•the Govern~cnt, the titlo to the 

invention and to thu patent obtained thereon becomes 

1:.he. property of the Government"; .· . 

(b) If the invention nis. made in the .CO~SO· of .. tho',:.:. 

general cimp1oyziiont of such person on the time or' at "tho 

·.expense of the Government but not by· di.Teet 'dcs:ig~tion ! 

·or employment for that purpose, the Goverrnnent has an .. ~ , 

· implied license to use the invontiort, but thu title 

thereto and to tho patent acquirud thereon is the 

property of the . inventor"; · .. .. . . . .. . . . • " >' 

· (c) i~ ~asos where thore is no dc~ignation to 

''invent and tho 0dovclopnent is· not evolved :Ln the-lino 

of duty of tho 9mployoc, the Government inventor becomes Uthe sole m·mor of the invention and of the 

patent acquired thereon, ~nd no implied license 

accrues to tho Unitc.>d States" by reason of his employment. 

. ' 
' > REF ID :·A10469. 

In addition to th~ considerable legal difficulties 

inh.erent in the modification of the present liar Department 

policy proposed in the .Department of Justice report, there is 

the practical difficulty of re1°arding Goverrnnent "employee" 

inventors for their inventions. In my opinion the hope of 

financial rei.vard offers the strongest incentive to invent, 

Under the present policy, wherein the llemployee" retains the 

commercial rights to his invention, many valuable inventions 

are made available to the Governm~nt on a royalty-free basis. 

Unless a system of cash bonuses or promotions and aalary increases is provided which would substantially replace the 

financial returns that might be realized from patent rights, 

the incentive to invent will be destroyed and manr valuable 

men WTI.i.-fie led to leave G'Overnment service and enter private 

employ. 

/ Considered both from tho legal standpoint and as a 

question of practical, operative administrative policy, a uniform 

equitable policy of procedure for tho Govcrnmnnt, controlling its 

relations with Government employees as to their inventions and 

patonts is highly desirable, but, because of public interest and 

tho personal lugal ri;:;hto of the partios involved, such policy 

can be defined only by Congress and no power to doclarc such a 

policy is, or can be, legally vested in administrative officqrs. 

This identical point is statod at length (pp, 205-209) by Justice 

Roberts in writing the d·.;;cision of ·tho Supremo Court in Uni tcd 

Stat0s v. Dubiliur Condcnsc;;r Corp., 289 u. s. 178, which same 

point was also concurred in by Justice Stone a...""ld Justice Cardozo 

in scparatu opinions (pp. 219-223) in tlmt caso. / 

In viow· of .:those considerations it is rccor.un..mdod that 

tho l.'far Dopartr.1cnt assent to th1; recommendation of the Dcpartmunt 

of Justice only to th.., uxt1..mt tilat thu decisions of the Supreme 

Co~~ ~s uxprusscd in Solomons v. Unitwd Status, 137 u.s. 3~2 (1890), 

ana Um.tud States v. Dubilicr Condenser Corp., 289 u.s. 178 (1933), 

.and the.: oxistina policy of ·th1.. i{ar Dc.partmcnt as oxprossod in 

AR 850-50, legally and lo~ically permit. 

11 SIGN::;J)11 

THOI:iAS .!i. Gl"GEIJ 

Major Genoral 

Tho Judge Advocate GOncr~l 

3 
REF ID:A1046~ 

CO?Y 

OFFICZ. OF SCIEi~TIFIC ~S£AH.CH AiJD DEV:.LOPl·K.J T 

WASIITHGTOH, D. C. 

The Honorable John F. Sennett 

Acting iiead, Claims Division 

Department of Justic~ 

Washington, D. C, 

Dear Ur. Sennett: 

iiovombcr 2, 1945 

Your predecessor, iir. Rawlings Ragland, by letter dated Au3ust 

14, 1945 transmitted to me a cow of the llii'irst Report of the At-t.orney 

General to the President" co·1ering the Department of Justice Patent 

Policy Survey. 

On August 20 I acknowledged receipt of the copy of the report 

and pointed out that although I ha.d not had opportunity to study ·the 

document with th~ care that I wished to give it, there was ~ne matter 

of importance which I desired to bring to your attention at that tL11e, 

namely, the treatment of industrial contractors as though their.positions 

with respect to the Government were exactly the sarae as those of Government 

employees. 

In my lotter I pointed out that an independent contractor of~cn 

brings to tho research that ho docs for the Government under contract 

not only previous "knaw·-howlf, but a substantial investment of tir.i.c., r.1011cy, 

and personnel in such research and that this investment shoul<l in equity 

be recognized by tho Government in contracting for furtlwr rcsoarch. In 

my letter I also stated that v1hile I was incli.."1.ed to agree with the con-· 

clusions contained in the report with rcsp6ct to Govcrnr.lont cmployo~s, 

suc}.1. conclusions introduced problon1s of their mm and I rrould vrri to you 

in more detail about these matters in tho near future. · 

Since that time I hB.v~ had· opportunity to give the matt1Jr fur"t;hcr 

thought and obtain tho views of others. In this conn..::ction, I have had 

opportunity to review Secretary of llar Patturson's .latter to you of 

September 24·, 1945. In that lctt0r h,j sets forth three reasons uhy a 

mandatory requirement that fu!l ol'1r1urship by th~ Govurn.m~nt of pat~nts 

eventuating under all Governr.lent contracts should not be made. In this 

connection I should like to bring to your attuntion th~ R0port of thu 

Federal Aviation Commission of January, 1935 (?4th Congress, 1st Session, 

Senate Doc11Mcnt No. 15) uhcrc at pages 176 and 177 Ur. Clark Horrell, 

Chairman, Mr. Edward P. Warner, Vice Chairman, I.It.ssrs. Albort J. B ... rrcs, 

Jerome c. Hunsaker, Franklin K, Lane, Jr,, as ~cmburs of th~ Com.'Tlission, 

and Mr. J. Carroll Cone as Executive Secretary to the. Commission, ar~ of 

the ea.mo view as Judge Pattorson. · 
REF ID:A10469' 

-2-

I £~ agree with Judge Patterson in each of the reas0ns·w)\y 

contractors should not be required to assign title to their inventions 

to the Government and add that ii' such requirement had oeen in enstence 

in 1940 this 0£.tice could not have accomplished the objectives obtained 

by it in the successfUl prosecution or the war. The views of the 

gentlemen mentioned above should not be passed over without serious 

consideration. 

A!J to~he policy to be established £or inventions of employees 

of the Government, the Secretary df "flar ie of the vi~T that they, like 

developnerit contractors., must bo dealt .Ii.th on the basis of !air dealing 

in tho individual case. He points out that in the experience of the 

War Department many notable contributions o:r vital importance to tha 

national defense have been ovolvod under tho practice of l~avin~ commercial rights in tho inventor and that this systoid of incentive may 

bo 1R>rth more to all the poopl\J than it costs some. of them. Ho then 

urgos in lieu of rocommond.ing to tht. !'resident that th~s"' matters b1.o 

handled by Exocutivo Order, you recommend that they be disposed of by 

legislation d~ introduced b~for~ the Congress in view of (1) th~ great 

public interest in tho mtter., (2) tho diversity of opinion vrhich ha.a 

always boon associated with these questions, (3) th~ fdct that such 

procedure will afford to Govormncnt omp1oycos and. devcl~pnont contractors 

an opportunity to present their vic'\Ts to Congross, and '(4) the opiniori 

of tho maJority of tho court in the case of Unitud States v Dubilicr 

Condenser Corporation, 269 US i78 to thu wffcct that those qu~stions 

should be hand.lad by legislation rather than by administrative r~gulation. 

I Join tho Secretary of 'War lll urging that those questions be 

not disposed of by precipitous kocutivc Order, but that thc..y b"' submitted to Congress to the end that it may obtal.Il tnc views of all 

intorostcd, and then determine the question by duly enacted l~gislation. 

, , 

• . .. . ' 

Vor.1 truly yours 1 

(Signed) V. Bush 

v • .Bush 

Director 

. ' . 
•• 

REF ID:A1046i 

COFY :/AR DEfARTi iEUT 

01•1 'IC~ OF TiiE llrIDi.R SE~TARY 

UASHIHGT0( 1 D. c. 

Honorable John F. ::>ormett 

Acting Head, Cl.a:lms Division 

Department 0£ Justice 

\fashington 25 1 D. c. 

Dear Mr. Sonnett: 

In his letter to me 0£ August 141 1945 your predecessor, !fr. 

Ragland, requested an expression or my viev1s re&ardillG a proposed report 

which the Attorney General contemplates suDmJ.tting to the President concerru.ng the patent policies 0£ the Government. The portions of the proposed report which particularly c-oncern the \far Department are those which 

suggest an Executive Order makin3 mandator-3 the inclusion of certain patent 

provisions in al1 development contracts ana contracts with Govermnent 

employees, subject to deviation only upon application in individual cases 

to an interdepartmental Government Patents Board. Those proposed patent 

provisions provide for an assignmant to tho Government of' a1l inventions 

made in tnc porfon:m.ncc of such contracts. 

In view ot its experience in this fl.uld. 1 the \/ar ~e;artmcnt would 

feel compelled strongly to object to your proposLd rcca:Jr.lOndation.s of an a.~ocutivo Order of this kind, ~or reasons which I summarize below. I. 

believe such an l:hcccutivc Order would constitute so scri~us an obstacle to 

tho maintenance of modern and ci'i'iciont arl'18.ID.c11l. in the. days to com.u, that 

• 

I request that this lotter, or a copy thereof,, be transmttcd to the 

President Yd. th tho proposed roport if it bo de. tcl'Jl'linc:d to LJAk1.. substantially 

tho rccommondations to which obJc.ction is :i1orc taken. 

Cortal.n types of mandatory contract provisionsa proscribQd. by i«ocuti'V'C Order,, have boon usad. during tho war, and t.hcy have met with substantially uniform accoptanco by Government suppliers. Such ,tll"OVJ.sions 

include tho anti-discrimination clause, the warranty 8,6ainst payment of 

contingent foos 1 and th1.o like. tiuch ganoral accc.ptanca 0£ the.so cla.uqcs 

affords no basis however to believe that thu- mandatory patent clause you 

propose would moot with equal, or indeed any1 acceptance among Govol'l'DIJ.Cnt 

suppliers. ... . A mandatory rcquiromont that full cnmcr.ship of cvc.ntuatinti .Jatcnts 

shall pass to tru.. Oov..;irm:iont under all dovalopncnt contracts would in effect 

require such contmcts to include not oncy tho purchase o! Govurnmont rights 

to use tho knowlcdgo o.chio.vad1 but also the right to authorize others to... 

use it for thm.r privato.'CommcrCliil purposes. This \70Uld havu th:roc 

:6lportmr-r-C£rocts -- - · -----, · ----..........__---"._. I ... I .. 
REF ID:A10469. 

First,, it would seriously hinder the Goverrunent's obtaimng contractors able and qualified to undertak.~ a p&Fticular research and developnant proJect. The Government cannot effectively obtain research or 

developnent by compulsion. Predugtive resea;-ph and develo.1.:xnent result onq 

from the consent and cooperation or the contractor. In ruost oases the .,ar 

Departr.lellt has little' choice as to who the research or uevelo];lllent contractor 

shall be. Cor11I11only the selection must be made .trom a very small group of 

qualified contractors,, a large percentage of '\'lhich are industrial organizations,, 

which are so qualii'ied because of technical information ana lmowledge acquired 

in a competitive commercial market. The wartime experience of the \far De!B'bmit 

is that such contractors arc unwilling to soll invcntio~ having an actual 

or potential conmorcial value to them. The proposed r.x'ocu\ivo Ordor is 

certain to encounter serious resistance from such qualifi~d contractors 

which vrould gravoly hampor tho programs of research and developnont upon 

lThich tho •of rectivaness of our military cstablishm<mt in tho yoars to como • • will chiefly rest. . Second,, it would further narrow the Government's choice i:n selecting 

contractors because in numerous cases the scientists employed by industry 

insist upon retainitl(; all or some part of the commercial rl.6hts in inventions 

made in the performance or their duties. In these instances contractors 

caiu>.ot a~ree to transfer to the Government invent;ions made in the performance 

or a developnent contrac~ because or restrictive agreements between the contractor and the inventors. The Government has no power to compel such 

scientists to transfer their rishts to the contractor or to the Govermnent. 

Accordirll:lY,, unless the Government is able to purchase sucn invE'ntions from 

these scientists at a price ,,hich can be Justified it lYill be compcUed to 

let the contract w1th-a less qualified contractor. 

Third,, it uould greatly incrcaso the ovc.=rall cost of research and ' 

development. When the contractor grants to the Govo,rruncnt only tho royaltyfrce ri~ht to practice and cause to be ,llI"acticcd for it·tbc ihvcutions made 

in the performance of the contract, tlar Dupartmc.nt c~crioncd ha:s· been that th~ oontractoP regards fair co~pcnsation as consisting of estimated costs 

or tho uork to bo dono, ~lus a profit tru..roon. Iim'¥'cvur1 when a contractor 

is called upon to agree to asaitin to tpo Government f'ull title to inventions 

mad ... in the performance of tho contmct (vdth · tllu right to liccnsv others) 

the "1xpc.rionc1.. and •Judgment of tnc War Department i:ndicat"'s 'tl1s.t the contractor,, faced lT.L th thu !'act that his corunorcial c01npcti tors WJJ.l thus b\.. 

i'rco to use th~ inventions,, 'rill r~g~ fa.:i,,r componsa~ion'as including not 

only the 4..Stirnatcd costs of tho \tork,, plus a profit thereon,, but also an 

evaluation of all past accumulated 1,.X,tlwrl.~1).c-0 a..1d !<:nmv-hm: 1...ntcring .Lllto 

th .. •rork to b4.. don .. ,, together with ad.1..quate compensation !or th~ loss of 

exclusiv"' cor1uncrcial rights. Th~ added cost thus ontailc:.d would co~1stitutc. 

a suLstantial drain upon fWJds appropriaicd by Congress for research and 

development in the. 1111li tary ... stablishm1..nt and \tould to that ~xtont· curtail r~suarch and :unprovam~nt in aid of thu national dcfcns~. This rusult lrould 

be a matter of sc.rious concurn to the. \far D.:.partmcnt. 

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• 

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• 
• 

1/ith respect to Government employees, it is to be observed that 

they, like developnent contractors, must be dealt Ydth on the basis of .:f.'a1.r 

dealing in the 1Pd.1vidua.l case. The i::ircUl'l.stances of e1nploymem; vary wideq 

between the several Departments. In many laboratories, arsenals, provin~ 

grounds and engineering installations of the ~far De.l:'artment it has been 

found that the ingenuity 0£ the er.1ployee has been usefully stimulated by 

leaving commercial rights in him. I appreciate i"ull.t t;he force o:r your 

suggestion that this creates a contingency in which the employee may prof':Lt 

personally. It must not be overlooked,. however, tllat in 1iar Department 

Astablishments, engaged in pcrf'acting the weapons and armaJnonts of warta.z·a • , many notable contributions of vital importance to the :national def'onso have 

been evolved under the practice or loaviD.3 cornzoorcial rights 1 n lihc l..nv<Jntor9 

and that this system of incentive may b~ worth more to all the people than 

what it costs some of thorn;- - -- - - -- - - - - -

If, notldthstanchng the foregoing considc.rations, you adhcru to tho 

recommendations contain1Jd in tho proposed raport to t~ ~£fc.ot that cvor:r 

Goyornmont agency, by rogulations and by agrc ... r.iont with umployoos and 

contractors, shall reserve the right to an assir~nmcnt of th~ title to every 

invention which involves bhc. use of Government facilities, 1.1S.tu1•ials, tirlo 

or f'uncis or relates to tho authorized or permissive functions of th~ ~raploy~o 

or to the work called for by tho contract, I urge tllat 1?]: li<..u of'_r.ccOJDDlcnd .. i~o trt~sidcnt that these matters bo handled ~ Executive Ord1..r, you 

rocgDl!lgn t~-i-~oc~poscd~of by _l:£&islat~o11_~Ul.:~1nt~ducod be.fora tho 

! I 

~ . ' . 

Qg.,.no~fJS_ in !ls~ C?f (i) tho gr~at public interest in tho matt.ur, (ii) tho 

diversity of opinion which has always bc.c.n associated u1th thcso qu .... st1ons. 

{iJ.;i.) tho fact that such procoduru i.nll afford to Government \.M")loycos and 

dovolol'JD.ont contractors an opportunity to present thoi:r vio-.rs to Cong:ri::ss 

and (iv) tho opinion of the majority of th~ court in thL cas~ of United. States 

v Dubillcr Condonsor Corporat::i.on, 289 US 178 to tho o£f oct that those questions 

shoUld bo haiidlod by iogiSlation rather than by administratiV\:. regulation. 

Sinccr<Jly yours, 

signod 

ROBE.RT P. PA.TTERSON 

Under Secretary of War 
•.. 

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... 

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* * * 

REF ID:A1046~ 

• 

U. S. DEPARrMENT OF JUSTICE 

Investigation of Government · Patent Practices and Policies 

Report and Recommendations 

of 

The Attorney General 

to 

The r resident 

VOLuMEIII 

XV. DEPARTMENT OF JUSTICE INVESTIGATION a943-46) 

, 

P~. 3o\-J... 

~. The Office £i Scientific Research and ~Y.!!l:opment was inclined · to agree, although somewhat reluctantly, with the recommendation in the 

first report:527 

* * * I see the difficulties of leaving commercial rights in the hands 

of a Government inventor, on a subject within the line of his duty and 

resulting, from work in a Government laboratory, so clearly that I am sure 

the matter needs to be i'ully explored. * * * you are on sound ground in recommending complete assignment by 

Government employees, although this certainly introduces some problems of 

its own. 

In a later letter, following the War Department's adverse reaction to 

the Attorney.General's recommendation in the first report, the Director of 

OSRD joined the Secretary of War 528--

in urging that. these questions be not disposed of by precipitous Executive or~er but that they be submitted to Congress to the end that it may obtain 

the views of all interested and then determine the question by duly enacted 

legislation. 

• 

- 527 Letter of August 20, 1945, from V. Bush, Director of Office of 

Scientific Research and Deve~opment, to Rawlings Ra.gland, acting head of 

Claims Division, Department of Justice. 

52$ Letter of November 2, 1945, from V. Bush, Director of Office of 

Scientific Research ana Bevelopment, to John F. Sennett, acting head of 

Claims Division, ·Department of Justice. 
.. 

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REF ID:A104692 

• 

8. The Navy Department cateogrically condemned the requirement of 

assignment of patent rights by employees as destructive of incentive:529 

* * * It has been our experience that many top research workers accepted 

Government employment at least in large part because they retained the commercial right~ to any inventions which they might make while under contract. 

I have no doubt that if such workers were required to assign title to their 

inventions to the Government, many of them would include in their compensation und~r our contracts relatively large contingencies for possible fUture 

inventions. As .we ~uuld probably not be able to pay such high compensation, 

we would be deprived of tpe s·ervices cif many of the workers. 

The Navy Department cannot agree with the implication contained in the 

tentative report of the Department of Justice that the incentive to contractors 

or employees because of the commercial rights to inventions is of little 

importance. In addition, I think that your report overlooks the fact that 

an employee's cooperation in disclosing inventions is greatly enhanced if 

the employee retains certain rights. We have had experience in the past 

with cases where th.4 inventor is to as~ign title to the Government and we 

have found it often difficult in such cases to obtain disclosures of such 

inventions and the fuli cooperation of the employee. 

529 Letter of January 5, 1946, from Assistant Secretary of the Navy H. 

Struve tlensel to Assistant Attorney General John F. Sonnett. 

(pages 301 and 302) 

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