which persons can come from the outside and get access to the information that we have within our agency that is classified.

We have, in three special circumstances, waived rights, except as against the Government, in atomic energy inventions under contracts. These three categories include, first inventions made under certain research grants to educational institutions and training programs; second, inventions in the apparatus or process for the production of fuel elements and fuel and core cartridge assemblies; and, third, after January 11, 1961, the Commission waived rights in the field of atomic energy in foreign patents as respects inventions arising out of Commission research and development contracts where the work is performed at privately owned and operated facilities as distinguished from Government-owned and operated facilities, subject to certain terms and conditions that reserve to the Government a nonexclusive license in any foreign patents secured by the contractor. That is the answer to the third question.

The fourth question, Mr. Chairman, asks whether the DOD policy had any effect on our ability to negotiate contracts. I would have to report that as far as we know, it has not.

Senator MCCLELLAN. I didn't remember that question being asked in the letter offhand.

But what I had in mind to ask you at this moment when you concluded your remarks was, in the course of your contracting for research with contractors who also are doing research for the Defense Department in substantially the same field, is the fact that you take title to the invention, whereas they take only, the Defense Department takes only a license, has that conflict in policy so far as you know had any harmful effect or made it more difficult, let us say, for you to negotiate a contract where you take the title or the right exclusively, that it has given you any problem?

Mr. NAIDEN. No, I would say that it has not, Mr. Chairman. Sometimes we have had extended negotiations in discussion, but I wouldn't call it a problem.

Senator MCCLELLAN. I am reminded by counsel for the committee that actually in your field the Defense Department follows your policy, so, therefore, there is no conflict.

Mr. NAIDEN. That is right.

Senator MCCLELLAN. I understand. I was thinking in terms of their general policy-there is a conflict in their general policy and your policy, but when that contract is in your area, in your field, they follow the policies you pursue.

Mr. NAIDEN. That is correct.

Senator MCCLELLAN. So that there is no real conflict?

Mr. NAIDEN. No, there is no conflict.

I would like to add a comment. The Comptroller General, in reading his statement, referred to the George Washington report, and said, I believe that the George Washington report stated we had not always gotten the fullest cooperation from industry.

I don't recall of any industry since I have been there from which we have not gotten the fullest cooperation.

Senator MCCLELLAN. I guess you will find sometimes they are pretty tough negotiators, don't you, they try to negotiate for their interest? Mr. NAIDEN. That is right. The George Washington report said

73601-61-pt. 1- -13

(The letter referred to is as follows:)

Dr. GLENN T. SEABORG,

Chairman, Atomic Energy Commission,

Washington, D.C.

U.S. SENATE, March 27, 1961.

DEAR DR. SEABORG: The Subcommittee on Patents, Trademarks, and Copyrights expects to resume its hearings of Government patent policy during the latter part of April. These hearings will be concerned primarily with S. 1084 and S. 1176 but will also cover the general subject matter of the reports on the patent practices of the various departments and agencies which have been published by the subcommittee.

In this connection, I should appreciate your making available a witness who can testify with respect to the following matters:

1. The views of your Commission as to the probable effect of S. 1084 and S. 1176, respectively, upon your operations.

2. The views of your Commission as to the workability of section 152 of the Atomic Energy Act of 1954.

3. The circumstances under which your agency has waived title to an invention arising out of a research and development contract.

4. Any effects upon your ability to make research and development contracts in the atomic energy field, which have resulted from the use of the ASPR patent clause in contracts made by the Defense Department with your contractors for research and development in other fields.

If the witness wishes to submit a prepared statement, I should appreciate receiving a copy as far in advance as possible.

With kindest regards.

Sincerely yours,

JOHN L. MCCLELLAN, Chairman.

Mr. NAIDEN. I am perfectly prepared to rest with the answers we have given in the statement, and I won't burden the record any further with it, unless the chairman wants me to.

I have nothing to add to what we have said in the statement. Senator MCCLELLAN. I haven't read your statement. Can you just at this point very briefly cover your answers?

Mr. NAIDEN. Yes, we can.

Senator MCCLELLAN. Just very briefly.

Mr. NAIDEN. The first question I have answered is: What is our policy in this field?

Senator MCCLELLAN. You have already answered that?

Mr. NAIDEN. Yes.

The second question asked whether our procedures under section 152 of the Atomic Energy Act is workable and our answer to that is, we think it is.

The third question concerns situations in which the Commission has waived its rights in inventions arising out of research and development work. The Commission has exercised its waiver power as to various arrangements and relationships, including those arising from AEC services and material that are generally available to the public on a nonpreferential basis.

Now, there are three classes of these things.

The first, inventions resulting from the sale or distribution of stable or radioactive materials, or from irradiation and other services publicly available.

The second are inventions resulting from the use of the gamma irradiation facility at the National Reactor Testing Station.

And the third, inventions resulting from access permits, which is a rather specialized arrangement we have in the Commission under

which persons can come from the outside and get access to the information that we have within our agency that is classified.

We have, in three special circumstances, waived rights, except as against the Government, in atomic energy inventions under contracts. These three categories include, first inventions made under certain research grants to educational institutions and training programs; second, inventions in the apparatus or process for the production of fuel elements and fuel and core cartridge assemblies; and, third, after January 11, 1961, the Commission waived rights in the field of atomic energy in foreign patents as respects inventions arising out of Commission research and development contracts where the work is performed at privately owned and operated facilities as distinguished from Government-owned and operated facilities, subject to certain terms and conditions that reserve to the Government a nonexclusive license in any foreign patents secured by the contractor.

That is the answer to the third question.

The fourth question, Mr. Chairman, asks whether the DOD policy had any effect on our ability to negotiate contracts. I would have to report that as far as we know, it has not.

Senator MCCLELLAN. I didn't remember that question being asked in the letter offhand.

But what I had in mind to ask you at this moment when you concluded your remarks was, in the course of your contracting for research with contractors who also are doing research for the Defense Department in substantially the same field, is the fact that you take title to the invention, whereas they take only, the Defense Department takes only a license, has that conflict in policy so far as you know had any harmful effect or made it more difficult, let us say, for you to negotiate a contract where you take the title or the right exclusively, that it has given you any problem?

Mr. NAIDEN. No, I would say that it has not, Mr. Chairman. Sometimes we have had extended negotiations in discussion, but I wouldn't call it a problem.

Senator MCCLELLAN. I am reminded by counsel for the committee that actually in your field the Defense Department follows your policy, so, therefore, there is no conflict.

Mr. NAIDEN. That is right.

Senator MCCLELLAN. I understand. I was thinking in terms of their general policy-there is a conflict in their general policy and your policy, but when that contract is in your area, in your field, they follow the policies you pursue.

Mr. NAIDEN. That is correct.

Senator McCLELLAN. So that there is no real conflict?

Mr. NAIDEN. No, there is no conflict.

I would like to add a comment. The Comptroller General, in reading his statement, referred to the George Washington report, and said, I believe that the George Washington report stated we had not always gotten the fullest cooperation from industry.

I don't recall of any industry since I have been there from which we have not gotten the fullest cooperation.

Senator MCCLELLAN. I guess you will find sometimes they are pretty tough negotiators, don't you, they try to negotiate for their interest? Mr. NAIDEN. That is right. The George Washington report said

73601-61-pt. 1— -13

something about us being deprived of the cooperation. I wouldn't say we had been deprived of the cooperation or of any contractors. We have on occasions been deprived of some time, Mr. Chairman. Senator MCCLELLAN. Some time?

Mr. NAIDEN. Yes, sir. It takes a long time to negotiate contracts. Senator MCCLELLAN: In other words, they are actually a little more contentious?

Mr. NAIDEN. They represent ther interests very well.

Senator MCCLELLAN. Well, that enables them to stay in business. Is there anything further?

Mr. NAIDEN. We have commented on the bills that are before the committee in the statement.

Senator MCCLELLAN. You may comment on those.

Mr. NAIDEN. We, in the Atomic Energy Commission, would be a little reluctant to see a board established with a gread deal of power. Senator MCCLELLAN. That is under 1176, is it?

Mr. NAIDEN. S. 1176, that is right. This might very well be ultimately the policy which Congress adopts in these matters. We would prefer if this end is ultimately reached that it be reached in a step process, and we would like first to see a board established with such advisory powers or with some powers that Congress would see fit to grant.

Senator MCCLELLAN. Do you think that should be approached gradually and with some restraint in the beginning until you got experience with respect to how it would work?

Mr. NAIDEN. Yes, that is our general view.

We are perfectly willing to accept any mandate Congress wants to hand us on this, and we would try to work with any, and perhaps almost any would work. These things are not demonstrable by proof ahead of time, Mr. Chairman.

Senator MCCLELLAN. Very well.

Mr. NAIDEN. Further than that, we have no comment, unless Mr. Anderson has some.

Senator MCCLELLAN. Mr. Anderson, do you have any comment? Mr. ANDERSON. No. I think the statement sets forth the position Mr. Naiden has expressed.

I would add, in connection with the establishment of a board rather than the establishment of an administration, that the bill contemplates sort of an inflexible policy.

Senator MCCLELLAN. Which bill, now?

Mr. ANDERSON. S. 1176.

And to the extent that S. 1084 takes all title it sort of also sets up an inflexible policy.

Senator MCCLELLAN. You are saying the two bills are the same in that respect?

Mr. ANDERSON. That is correct. I think we sort of feel from past experience that there is a need for flexibility, that there are different situations in Government, the missions of the agencies are different, and that the equity of the contractor should be considered in connection with the division of rights in patents and proprietary interests.

Senator MCCLELLAN. We could be so rigid and so unreasonable and inconsiderate of the rights of our industry and of our contrac

tors that there would be no real incentive left to them to do the work?

Mr. ANDERSON. That is correct.

Senator MCCLELLAN. And to make their contribution, the contribution they are capable of making.

Again, I might say, to keep this record straight, that the bill that I introduced, S. 1084, does not necessarily reflect my views, the purpose of introducing it was to serve as a basis for hearings so that this problem could be explored and get the thinking and counsel of those who are experienced in this field, such as you gentlemen and your agency, and others whom we are hearing in the course of these proceedings. Thank you, gentlemen, very much for your cooperation.

Mr. Brooks of the Small Businessmen's Association, will you come around.

Mr. Brooks, identify yourself, please, sir, for the record.

(Mr. Brooks' testimony appears commencing on page 230. By order of the chairman.)

AFTERNOON SESSION

Senator MCCLELLAN. The committee will resume.

Mr. Loevinger, will you identify yourself for the record, the time you have been in the Government, and the position you hold, and so so forth?

STATEMENT OF LEE LOEVINGER, ASSISTANT ATTORNEY GENERAL, ANTITRUST DIVISION, DEPARTMENT OF JUSTICE; ACCOMPANIED BY JOHN T. DUFFNER, EXECUTIVE ASSISTANT, ANTITRUST DIVISION; AND WILLIAM J. LAMONT, ANTITRUST DIVISION, DEPARTMENT OF JUSTICE

Mr. LOEVINGER. My name is Lee Loevinger. I am the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice. And I have held this position since March 16 of this year. Senator MCCLELLAN. Have you previously been with the Government?

Mr. LOEVINGER. Yes, sir. I had some period as a trial attorney with the National Labor Relations Board, and I was with the Antitrust Division of the Department of Justice from 1941 until sometime in 1946, with some time out for active duty with the U.S. Navy. Senator MCCLELLAN. Very well.

You have a prepared statement?

Mr. LOEVINGER. Yes, sir.

Senator MCCLELLAN. Do you wish to read it or do you want to just insert it in the record?

Mr. LOEVINGER. I would be happy to present it to you.

Senator MCCLELLAN. All right, you may. Will you identify your associates with you?

Mr. DUFFNER. My name is John Duffner. I am the Executive Assistant in the Antitrust Division.

Mr. LAMONT. William Lamont, attorney, Antitrust Division. Senator MCCLELLAN. All right, Mr. Loevinger, you may proceed. Mr. LOEVINGER. I appear in response to the chairman's request to