Invention Secrecy Increased in 2016

There were 5,680 invention secrecy orders in effect at the end of Fiscal Year 2016. The U.S. Patent and Trademark Office reported that 121 new secrecy orders were issued in 2016, but also that 20 existing orders were rescinded, for a net increase of 101 over the year before. The latest figures were released under the Freedom of Information Act.

The government may impose a “secrecy order” on a patent application under the Invention Secrecy Act of 1951 if it believes that disclosure of the underlying invention would be “detrimental to national security.” Under those circumstances, a patent is withheld and the inventor is prohibited from revealing the invention unless and until the secrecy order is withdrawn.

The majority of secrecy orders apply to inventions that were developed with government sponsorship, in national or military laboratories or by government-funded contractors. So the ensuing secrecy amounts to the government silencing itself.

In a subset of cases, however, secrecy orders are imposed on private inventors who developed their idea without government support. There were 49 such orders in FY 2016. These orders, known as “John Doe” secrecy orders, seem like a form of prior restraint on individual speech that would be arguably inconsistent with the First Amendment.

But there have been few constitutional challenges to the Invention Secrecy Act to date, and none that has dislodged or modified the Act.

In 2014, inventors Budimir Damnjanovic and Desanka Damnjanovic filed a lawsuit seeking compensation for a secrecy order that the U.S. Air Force imposed on them. They also argued that the Invention Secrecy Act itself was unconstitutional.

“Because the Patent Secrecy Act prohibits Plaintiffs from speaking of their Invention to third parties, including potential customers, it violates the First Amendment of the Constitution,” their May 14, 2014 complaint stated.

Moreover, “the Patent Secrecy Act has resulted in Plaintiffs being deprived of property without due process and just compensation in violation of the Fifth Amendment.”

The court dismissed the constitutional claim because by that time the secrecy orders had been lifted and therefore, the court determined, the inventors did not have standing to make their constitutional case.

“Plaintiffs’ First Amendment argument fails because the harms they claim they suffered are past injuries. Further, the purported prohibition on speech Plaintiffs allegedly endured is not an ongoing issue, given that the secrecy orders have been lifted,” according to a September 22, 2015 court order. (Damnjanovic v. US Air Force, E.D. of Michigan, S. Div., 14-11920).

Ultimately, however, the parties reached a settlement regarding the compensation issues, and in December 2015 the government agreed to pay the inventors a lump sum of $63,000 to dismiss the case.

For related background, see “Congratulations, Your Genius Patent is Now a Military Secret” by Joshua Brustein, Bloomberg, June 8, 2016.

The Department of Defense published a proposed rule in the Federal Register today on “Withholding of Unclassified Technical Data and Technology From Public Disclosure.”

The rule “is meant to control the transfer of technical data and technology contributing to the military potential of any country or countries, groups, or individuals that could prove detrimental to U.S, national security or critical interests.”

“For the purposes of this regulation, public disclosure of technical data and technology is the same as providing uncontrolled foreign access. This rule instructs DoD employees, contractors, and grantees to ensure unclassified technical data and technology that discloses technology or information with a military or space application may not be exported without authorization and should be controlled and disseminated consistent with U.S. export control laws and regulations.”