As set forth in a Federal Register Notice issued April 20, 2012, Congress has asked the USPTO to consider whether it should take steps “to protect economically significant patents from discovery by foreign entities” by extending the current national security screening program to encompass patent applications that may be important to the “economic security” of the United States. The USPTO has asked for public input on thirteen specific questions relating to economic security-based secrecy orders and three specific questions relating to national security-based secrecy orders. Written comments should be submitted by June 19, 2012.  

The Congressional Request

As set forth in the Federal Register Notice, the Commerce, Justice, Science, and Related Agencies Subcommittee’s report on the 2012 Appropriations Bill stated:

By statute, patent applications are published no earlier than 18 months after the filing date, but it takes an average of about three years for a patent application to be processed. This period of time between publication and patent award provides worldwide access to the information included in those applications. In some circumstances, this information allows competitors to design around U.S. technologies and seize markets before the U.S. inventor is able to raise financing and secure a market.

H.R. Rpt. 112-169, at page 18 (July 20, 2011).

The Subcommittee has instructed the USPTO to study these issues:

PTO, in consultation with appropriate agencies, shall develop updated criteria to evaluate the national security applications of patentable technologies [and] to evaluate and update its procedures with respect to its review of applications for foreign filing licenses that could potentially impact economic security.

H.R. Rpt. 112-169, at page 19 (July 20, 2011).

According to the Subcommittee, protecting “economic security” would ensure that “the United States receives the first benefits of innovations conceived within this country, so as to promote domestic development, future innovation and continued economic expansion.”

Thus, the USPTO is seeking comments as to “whether an economic security screening procedure, which borrows from the current national security screening procedure, should be considered.

The National Security Screening Program

As explained in the Federal Register Notice, in accordance with 35 USC § 181, “all U.S. patent applications are screened to determine whether the publication or disclosure of the application might be detrimental to national security.” If such a question arises, the application is forwarded to a defense agency (e.g., the Atomic Energy Commission or Department of Defense) for further review. If the defense agency determines that publication of the application would be detrimental to the national security, the application is placed under a secrecy order, and is withheld from publication and grant “for such period as the national interest requires.” In accordance with 35 USC § 184, it is against the law to file a foreign patent application directed to an invention that is subject to a secrecy order without first obtaining permission from the relevant defense agency.

An applicant whose patent is withheld from grant can seek compensation under 35 USC § 183 from the relevant defense agency “for the damage caused by the order of secrecy.”

An Economic Security Screening Program?

As summarized in the Federal Register Notice, “the Subcommittee has raised the concern of a potential risk of loss of competitive advantage during the period of time between publication and patent grant.” In response, the USPTO is considering whether there should be “a new regulatory scheme” modeled on the national security screening program. As outlined in the Federal Register Notice, the new program “would institute a secrecy order that forbids applicants from disclosing subject matter deemed to be detrimental to national economic security for such period as the national interest requires.”

Other Currently Available Options

The Federal Register Notice points out that an applicant currently can elect to maintain his application in confidence by filing a nonpublication request under 35 USC § 122(b)(2)(B)(i). Importantly, “[a]n applicant making such a request must certify that the invention disclosed in the application has not and will not be the subject of an application filed in another country, or filed under a multilateral  international agreement that requires publication of applications 18 months after filing.”

The Federal Register Notice also points out that an applicant currently can elect to expedite prosecution of his application by filing a request for expedited examination (e.g., under the Track I program).

Thus, to the extent that Congress is concerned about the impact of the delay between publication and grant, applicants already have options to shorten this time period, by delaying publication or expediting examination.

The USPTO’s Questions

The USPTO is soliciting comments on these questions in particular:

On the possible economic security program:

  1. Should the USPTO institute a plan to identify patent applications relating to critical technologies or technologies important to the United States economy to be placed under secrecy orders?
  2. Which governmental body should be designated by the President to provide the USPTO with the final determination as to which applications should receive this treatment?
  3. Which mechanisms should a governmental body use, at the time a patent application is filed, to determine that publication at 18-months of that particular application would be detrimental to national economic security?
  4. What criteria should be used in determining that dissemination of a patent application would be detrimental to national economic security such that an application should be placed under a secrecy order?
  5. Would regulations authorizing economic secrecy orders be covered by the current statutory authority provided to the USPTO, or would such orders require a new statutory framework?
  6. What would be the effect of establishing a new regulatory scheme based on economic security on businesses, industries, and the economy?
  7. How could Government agencies best perform such a determination while remaining in compliance with applicable laws and treaty obligations?
  8. How would such a policy affect the public notice function that underlies the policy of publication, including the ability of United States inventors and innovators to timely access the newest technical information upon which to build and stay ahead?
  9. What would be the impact on United States innovators, companies, and employers? How would such a secrecy order affect United States businesses that currently have substantial business operations or sales in foreign countries?
  10. Are the procedures currently available before the USPTO, such as nonpublication requests and prioritized examination, sufficient to minimize risks to applicants and allay concerns with 18-month publication of their invention? If not, why?
  11. What are the risks that an economic secrecy order regime would influence other nations to implement similar laws? Would the global implementation of an economic secrecy order regime benefit or hinder the progress of innovation in the United States?
  12. How would such a secrecy order regime affect international efforts toward a more harmonized patent system?
  13. Should the USPTO consider limiting what is published at 18 months?

On the current national security program:

  1. How should criteria currently used by United States defense agencies to screen patent applications for potential national security- based secrecy orders pursuant to 35 U.S.C. 181 properly encompass the scope of invention, which may have a bearing on ensuring the United States maintains its technical advantages in defense-related fields?
  2. Are there examples where technologies that could relate to United States defense capabilities that were excluded from consideration for a secrecy order?
  3. What is the competitive cost to expanding the scope of the criteria used to screen applications for security order consideration?
  4. Among patent practitioners, is there a common practice of attempting to avoid consideration for a secrecy order by drafting the patent disclosure in such a way as to not raise national security implications of an invention?

The Questions The USPTO Should Be Asking Congress

After reading this Federal Register Notice, I have my own list of questions for Congress:

How could preventing a U.S. applicant from obtaining patent protection possibly ensure that “the United States receives the first benefits of innovations conceived within this country”?

Does Congress not understand that the ability to obtain foreign patents can be essential to the ability of a U.S. applicant to secure an international market position?

Does Congress really believe that economically significant inventions (whatever they may be) can be kept secret for as long as it might take for the U.S. inventor “to raise financing and secure a market”?

To the extent that the time between publication and grant poses a risk to economic security, wouldn’t a better solution be to expedite examination of economically significant applications instead of burying them under secrecy orders?