By, Akanksha Badika and Divya Priyank.
Patent Secrecy: A Brief Background
The US Patent and Trademark Office (USPTO) reviews thousands of patent applications every year even before the public gets apprised of the inventions. Hence, it acts as a funnel through which the government determines which applications pose a risk to its national security and which do not. Under the Invention Secrecy Act of 1951, the commissioner orders which patents are sought to be kept as secrets for the sake of national security.[i] The Invention Secrecy Act does this by a three-stage procedure: the screening phase, maintenance of secrecy phase and the compensation phase.[ii] The screening phase applies to every Patent Application. The maintenance of secrecy phase applies to those inventions for which the Government has made a determination of the risk to national interest. The third phase i.e., the compensation phase, applies to those patentees who wish to get compensated due to loss of keeping inventions secret and letting the government use them till their issuance.
When under the provisions of this Act, a patent cannot be granted as such invention might pose a threat to national security of the nation, even private applications can be restricted from export or be available only to defense agencies or even get classified.[iii] Deterring technological progress by expansive secrecy orders would depend upon the nature of the orders, whether they remain temporary or permanent.[iv] Critics have argued not for the abolishment of the Act, but for the stoppage of its overuse.[v] Such overuse has materialized under the garb of national security.
Invention Secrecy: Analogizing Over US and Indian Patent Secrecy Provisions
In the US, the Invention Secrecy Act deals with preventing exportation of patents which are a threat to national security.[vi] There are parallel provisions in India as well, like sections 35 to 37 of the Indian Patents Act, 1970, whereby the Controller can withhold the granting of a patent on the same grounds. In the US, under Sec. 181, the head of the Government agency looks for whether there is any property interest of the government and upon such examination, notifies it to the commissioner to withhold the grant. If there is no property interest, yet there is a detriment to the national security of the country in the opinion of the Commissioner, then he withholds the grant and makes an application available for inspection to the Atomic Energy Commission, the Secretary for Defence, and the chief officer of any other department or agency designated by the President. If in the opinion of the aforementioned agencies, the grant of the patent may jeopardize the national security, the commissioner shall maintain the application in a sealed condition, to which the owner or the applicant has a Right of Appeal. The patent application cannot be withheld for a period of more than a year, and the Commissioner’s order has to be renewed every year in case there is a notification given by the head of the respective agency and can be rescinded in case the same is not deemed to be detrimental to national security any longer, by the respective agency.[vii]
In India, Sec. 35 deals with grant of secrecy orders in cases relevant for defense purposes, wherein the Controller can grant such orders upon notification by the Central government.[viii] Security of India, as per Sec. 157A of the Patents Act, would include: fissionable materials or their derivatives, traffic in arms, ammunition or supplying for purposes of military establishments or when it is taken in times of war or emergency situations. However, in India, the periodical review takes place every 6 months or on a request made by the applicant or on reconsideration of the Central Government or upon an application filed by a foreign applicant for an invention published out of India; the Controller shall forthwith revoke such secrecy order.[ix] Section 41 of the Indian Patents Act makes every order of the Controller and the Central Government relating to secrecy final and the same cannot be contested in any court on any ground, whereas such is not the case in US[x], where there is the Right of Appeal to the Secretary of Commerce under Section 181 of the Invention Secrecy Act[xi] and filing of a suit in the United States District Court or United States Court of Federal Claims for compensation under Section 183.[xii] Another significant difference appears in the language for payment of compensation upon use of the patent kept on secrecy order. In the US, there exist provisions wherein the applicant can ask for compensation for use by the defense agencies and can even move to the court for grant of such compensation, whereas in India, the Central Government may grant compensation if it appears that the applicant has suffered any hardship having regard to the novelty and utility of the invention, the purpose for which it was designed, and to any other relevant circumstances.[xiii] In the US, the Invention Secrecy Act provides for a penalty of imprisonment up to two years with a fine not exceeding $10,000[xiv], whereas in India, the penalty is abandonment of patent and the patent granted is liable to be revoked under Sec. 64.[xv] The abandonment provisions have been laid down under Sec. 182 of the Invention Secrecy Act and do not differ significantly from the Indian position.
Contemporary Dissensions over Invention Secrecy
With new developments in the US and India, there has been much debate about the patentability of these secrecy inventions posing a risk to national security. The USPTO in US and the Central Government in India are the gatekeepers of patent inventions which could possibly be detrimental to national security. Vesting such discretion on just one authority in India has made such provisions being arbitrary and vague. However, it becomes necessary to clarify the scope of ‘national security’ as covered within the US regime or what specific defense uses or purposes might come within the ambit of the Indian Patents Act, 1970. This term national security is indeed a broad and vague term and the different criteria under it might not be specifically listed due to dynamism, making the Invention Secrecy Act vulnerable to overuse. To determine whether there has been any detriment to national security of the country, the criteria has been kept secret. The criterion for PTO referral of a patent application to any defense agency for the purpose of review is whether publication of the invention might be detrimental to the national security of the nation. To make this determination, the Department of Defense (DOD) provides widespread guidance to the PTO through the Patent Security Category Review List (confidential) and the Militarily Critical Technologies List(secret).[xvi]
The following graph elucidates the data relating to invention secrecy applications filed in the last 5 years. The total secrecy orders in effect have been rising gradually, with a peak rise in 2016 and 2017. New secrecy orders imposed have risen the most in 2017 and have declined sharply in 2018. Secrecy orders have been rescinded the most in 2018. With such overuse of the term ‘national security’, the orders have actually increased to such levels[xvii].
The term national security has been defined as anything related to national defense or related to foreign relations of the US.[xviii] This definition is consistent with national security as a function of the executive branch. The President, as the only representative of the nation as a whole, has inherent foreign affairs power.[xix] The Invention Secrecy Act requires the licensing of information before the invention is exported, but neither includes standards for issuing or denying licenses. This lack of standards “sufficiently precise to guard against arbitrary and inconsistent administrative actions,” is conceded to be a fundamental flaw.[xx]
Conclusion & Suggestions
Imposition of secrecy orders blankly and vesting of such discretion with these agencies has become a bone of contention. There is a serious need to balance the inventor needs with national security, as the terms being so vague cannot be overused and overstated rampantly. Indian patent law does not favour inventors as compared to the US law, as the discretion vested with the Central Government and the Controller is vast and needs to be mended in order to balance the inventor needs with the need to impose national security filters.
The confidentiality of data would preserve national security. However, precision in the definition of ‘National Security’ is needed to limit the extent to which these secrecy orders have been used. Recent changes to the IT Act, in terms and order of preference in procurement under the Defence Procurement Policy would be positive approaches in relations to inventors who base their inventions on defence related equipment. Clarity on this point will ensure the protection of patentees and that no inventor suffers under the garb of national security and does not get trapped within the vagueness of the term National Security.
[i] 35 U.S.C. § 181 (2020).
[ii] Scott D. Locke, The Invention Secrecy Act: The USPTO as a Gatekeeper of National Security, 8(1) IP Theory 71, https://www.repository.law.indiana.edu/ipt/vol8/iss1/4.
[iii] Arvind Dilawar, The U.S. Government’s Secret Inventions, Slate (May 9, 2020, 9:00 AM), https://slate.com/technology/2018/05/the-thousands-of-secret-patents-that-the-u-s-government-refuses-to-make-public.html.
[iv] Kristen Senz, Do National Security Secrets Hold Back National Innovation?, Forbes (June 13, 2020, 8:30 AM), https://www.forbes.com/sites/hbsworkingknowledge/2020/01/13/do-national-security-secrets-hold-back-national-innovation/#68ea3b5c5dd4.
[v] Supra note iii.
[vi] Supra note ii.
[vii] 35 U.S.C. § 181 (2020).
[viii] Indian Patent Act, 1970, Sec. 35.
[ix] Indian Patent Act, 1970, Sec. 36.
[x] Indian Patent Act, 1970, Sec. 41.
[xi] 35 U.S.C. § 181 (2020).
[xii] 35 U.S.C. § 183 (2020).
[xiii] Indian Patent Act, 1970, Sec. 37(2)(b).
[xiv] 35 U.S.C § 186 (2020).
[xv] Indian Patent Act, 1970, Sec. 40.
[xviii] Exec. Order No. 12065, 43 Fed. Reg. 28949 (1978).
[xix] See Lee Ann Gilbert, Patent Secrecy Orders: The Unconstitutionality Of Interference In Civilian Cryptography Under Present Procedures, 22 Santa Clara L. Rev. 325 (1982), http://digitalcommons.law.scu.edu/lawreview/vol22/iss2/2 (citing United States v. Curtiss-Wright Export Co., 299 U.S. 304, 319 (1936) & S. REP. No. 1097, 90th Cong., 2nd Sess. 69, reprinted in 1968 U.S. CODE CONG. & AD. NEWS 2112, 2156-57) (at footnote 36).
[xx] See Sylvia Sanders, Data Privacy: What Washington Doesn’t Want You To Know, Reason 25, 37 (1981); See also Lee, supra note xix.