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National Security Patents and Secrecy Orders
Plus! A key 5G lawsuit over SEP patents, an important PTA precedent, and a proposal for "shares" in SEPs
As a general matter, patents are part of a social trade: inventors provide a teaching to the public of their technological innovations and in exchange receive a monopoly right. Since the beginning, the Patent Act of 1790 required the Secretary of State to keep a record of all specifications, to be reproduced upon request (remember, this was before the internet and printers) and even the original Venetian Patent Act of 1474 required a disclosure to the Doge, which would in turn share the invention with the public. After all, how can you possibly have a fair system of negative rights when people may not know what they could possibly be infringing upon?
There are exceptions, however. What if you invented a material that might be most useful in creating a missile? What if your invention was an explosive? You might want to protect it, but should you be able to publish it where peer adversaries would be able to learn from the teaching? For national security, that is a fundamental dilemma. To deal with this problem, the government has created an arcane world of classified patent applications. The world of secret IP contains thousands of patents. Companies like Anduril—which has been thinking hard about their intellectual property and how the legal system affects American incentives overall—are particularly prone to these interventions. This is the world of the patent secrecy orders.
The Murky World of National Security Patents
When you submit a patent to USPTO, you are immediately granted a patent number, which is like a serial number, but that is the only part of the process that is automatic. Immediately after you file a patent, it is reviewed by the patent office. Typically, the purpose of this review is to used to assign an art group and examiner. However, thanks to the Invention Secrecy Act of 1952, USPTO is able to flag patents under 35 U.S.C. § 181 as being detrimental to national security. There are hundreds of examiners dedicated to just this task. If they determine that they must remain secret beyond the eighteen months normally afforded to a patent application they can issue a gag order, though the government will not review a secrecy application if it has a foreign origin or a known interest by the government (yes, the military has patents, even the NSA—and you can license them!).
Any patent can be subject to these requests—in 1971, the military considered applying patent secrecy to solar panels. As of 2022, the official statistics say that there are are 6057 secret patents. These requests come primarily from the Navy and apply to military inventions for purposes of export control, but they also apply to private inventors in so-called “John Doe” secrecy orders—in fact, this is the second-largest category. The consequences of secrecy are serious: they range from export controls to total secrecy. Although appeals are permitted, the success rate was only 21% from 2013-2017. And although the military does regularly rescind secrecy orders, it is often decades later. One Harvard Business school study on these orders found predictable results: they did produce secrecy at the cost of reduced follow-on innovation.
This is typically bad for inventors. They may find it difficult to commercialize their technologies without a patent, after all, and are often bound by gag orders during the secrecy period. There are a number of infamous stories of unhappy inventors, like Jonathan Gold, who invented a secure wireless communications protocol. The Invention Secrecy Act has a mechanism to get compensation under 35 USC § 183: a direct settlement with the head of the agency that requested the secrecy order, but that settlement must be definitive; in the alternative, one may sue the government, but only upon the first actual use of the invention by the government, which may be difficult to monitor if the use itself is classified. And of course, while under a secrecy order, the inventor cannot file in any foreign jurisdiction without permission by the head of the agency, which they are unlikely to supply. NATO countries, though, have signed a treaty allowing for cross-jurisdictional patent applications with reciprocal secrecy orders, so there are exceptions.
Surprisingly, although there is a mechanism to apply secrecy to regular patents, there is no national security patent system writ large. Palmer Luckey, cofounder of defense company Anduril, has called for such a system. Indeed, it is surprising that although there are hundreds of examiners who examine applications to determine if they are appropriate candidates for secrecy orders, none of them spend any time reviewing the patent application to determine whether to grant the application. Although the application is tolled, by the time secrecy is lifted, the commercial window has often passed. It would make sense for USPTO to give the inventor the option to continue the patent process to continue under a classified examiner group in order to have clearly enumerated rights, at least so that the company can exclusively sell its products to the military and be prepared to commercialize to the public the day the secrecy order is lifted. It could also make sense to allow companies like Anduril to file patents under a classified seal from the start but still enforce them in the national security field only against companies like Boeing or Lockheed Martin. Today, defense contractors rely in part on trade secrets to protect their inventions, which introduces risk for the government: what if a contractor stops producing a product on which it relies? A classified national defense patent system may encourage more disclosure of potentially sensitive inventions—if a company knew that a secrecy order would not mean a suspension of patentability, perhaps they would not worry about patenting a sensitive technology while the government would get more disclosure around the key innovations it relies on.
Weekly Novelties
Gripping Gazette entries
US 20230099023 A1: A new video game controller from Sony that can charge other devices, like headphones. Will this be the new PS5 holiday breakout?
US 11,788,398 B2: A system from Schlumberger to make drilling safer for drill operators
US 11,788,918 B2: A fabric material that can detect leaks
Latter-day litigation
Telefonaktiebolaget LM Ericsson v. Lenovo, Inc., Eastern District of North Carolina Western Division, No. 5:23-cv-569 (E.D.N.C.): Ericsson sued Lenovo over slowness in licensing key 5G patents. Lenovo, a Chinese company, acquired Motorola and its key patents; this is likely another front in the US-China tech war.
Recentive Analytics, Inc. v. Fox Corp., No. 22-1545-GBW (D. Del.): An important precedent for patents for training machine learning models, holding that a machine learning algorithm is an abstract idea but machine learning patents with “unconventional technological solutions” may be patentable
In re Cellect, LLC, No. 2022-1293, 2023 WL 5519716: When considering obviousness-type double patenting for patent term extension, when different patent family members have different patent expiration dates based on patent term adjustment, the date after patent term adjustment should be used. This will mean that the earliest expiring member in a family will be used and terminal disclaimers may be advantageous to avoid having it used as a reference
Eventful expirations
US 6631540 B2: An Intel patent for high capacitance capacitors with low induction
US 6631542 B1: A patent from Honda for manufacturing laminated rings with a method claims for manufacturing laminated rings and an embodiment of a device for doing so
US 6631546 B1: A method from IBM for mushroom plating, primarily useful for coating hard discs
Notable news items
A new proposal for inventors owning “shares” in standard essential patents (IAM Media)
Caltech ended a billion-dollar mega-lawsuit with Apple and Broadcom over wireless communications with prejudice, presumably for a mega settlement (Reuters)
Cloudera was hit with a quarter-billion judgment over cloud storage patents (Reuters)