The Government vs. General Alexander: Who Owns His Inventions

By Peter J. Toren
August 17, 2014

General Keith Alexander (ret.)

Since retiring as the director of the National Security Agency in March of this year, General Keith Alexander has co-founded a company, IronNet Cybersecurity Inc., that reportedly charges up to $1 million a month to assist companies in protecting their computer networks from hackers. Gen. Alexander has suggested that this fee is justified in part because his company’s technology is based on his inventions relating to a “unique” approach to detecting hackers. Alexander has stated that he plans to file at least nine patent applications relating to this technology.

Certainly, Gen. Alexander can seek to leverage his NSA experience and expertise in developing a lucrative post-government career, however, the filing of the patent applications so soon after leaving government service and their cybersecurity subject raises serious questions about who actually owns these inventions and whether Gen. Alexander is seeking to profit from inventions that actually belong to the government. In interviews, Gen. Alexander has asserted that he discussed the ownership of these patent applications with lawyers at the NSA and has been assured that his inventions are not related to any work he did for the NSA, and, consequently, the inventions belong to him and not to the government. That NSA lawyers have purportedly concluded that his inventions are unrelated to his work is cold comfort in this era of Edward Snowden revelations.

Although much in intellectual property law has changed in the almost 225 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not. Under the law in its current form, “[w]hoever invents or discovers any new and useful process, machine, manufacture or composition of matter … may obtain a patent therefor.” 35 U.S.C. § 101. The Supreme Court has repeatedly confirmed the general rule that rights to an invention belong to the inventor. See e.g., Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc., 131 S.Ct. 2188, 2196 (2011). In accordance with these principles, unless there is an agreement to the contrary an employer does not have rights in an invention “which is the original conception of the employee alone.” United States v. Dubilier Condenser Corp., 289 U.S. 178, 188, 53 S.Ct. 554, 77 L.Ed. 114 (1933).

There is an important exception to this rule that applies to this situation: Inventions made by federal employees while working for the government generally belong to the government so long as they meet one of three criteria, absent certain exceptions that are not applicable here. Pursuant to Executive Order 10096, which was signed by President Harry Truman in 1950, and is now set forth in 37 C.F.R. sec. 501.6 (a)(1), “[t]he Government shall obtain … the entire right, title and interest in and to any invention made by any Government employee: (i) During working hours, or (ii) With a contribution by the Government of facilities, equipment, materials, funds or information, or of time or services of other Government employees on official duty, or (iii) Which bears a direct relation to or is made in consequence of the official duties of the inventor.” The section allows the government to give ownership of the invention to the employee while retaining a license when the “contribution” is “insufficient equitably” to justify taking title or when the government has “insufficient interest” in the invention.

The section also provides, among other things, that where the government employee was in a position “[t]o supervise direct, coordinate, or review Government financed or conducted research, development work, or both” that it is presumed that the invention belongs to the government. This presumption “may be rebutted by a showing of the facts and circumstances in the case and shall not preclude a determination that these facts and circumstances justify leaving the entire right, title, and interest in and to the invention in the Government employee, subject to law.”

Thus, the government is entitled to an assignment of all right, title and interest whenever the record indicates either that the invention is related to the employee’s official duties or that the government’s contribution of time, facilities, materials, or information was substantial (In re Williams, 228 U.S.P.Q. (BNA) 381, 1985 WL 71971 (Comm’r Pat & Trademarks 1985)), even where the employee’s own agency is willing to accept only a royalty-free, nonexclusive license on behalf of the government. In re Shank, 230 (BNA) 796, 1986 WL 83613 (Comm’r Pat & Trademarks 1985). Although an invention may not be directly related to the inventor’s official duties, the government may still be entitled to an assignment if the invention was made “in consequence of” the inventor’s official duties. Menke v. Department of the Army, 20 U.S.P.Q. 2d (BNA) 1386, 1991 WL 332038 (Dep’t Comm. 1991). “In consequence of” means that the invention is made as an obvious and direct result of the performance of the inventor’s duties. In re Philips, 2 U.S.P.Q.2d (BNA) 1641, 1642-43, 1987 WL 123823 (Comm’r Pat. & Trademarks 1987). Thus, the invention belongs to the government so long as “it was within general scope of [the employee’s] job description.” Menke,1991 WL 332038 at *3. That an employee invention was not necessary to, and was not used in, the project to which the employee was assigned does not preclude the government from taking title thereto. In re Philips, 1987 WL 123823 at *3.

Based on publicly available information, there are serious questions about the ownership of the nine patent applications that must still be addressed by the government. As an initial matter, there seems little doubt that the burden is on Gen. Alexander to rebut the presumption that the patents would belong to the government. The question is not solely whether Gen. Alexander developed the new technology on his private time but whether they are related to his previous work as director of the NSA or were made in consequence of his official duties. The apparent close relationship between the inventions and his previous official duties suggests that the inventions belong to the government. Indeed, it is hard to imagine that within a few months after serving for nine years of director of the NSA that he was able to conceive of multiple inventions that were unrelated to his previous job. The fact that lawyers at the NSA have now concluded that the inventions belong to him should not be the last word. After all they previously worked for Gen. Alexander and may want to again in the future. Under these circumstances Gen. Alexander bears the burden of overcoming the presumption that his inventions are related to his work as director of the NSA. While Gen. Alexander may be able to ultimately meet this test, the current record does not support the conclusion that the inventions belong to him.

The Author

Peter J. Toren

Peter J. Toren is an attorney in Washington, D.C., where he specializes in intellectual property litigation, including theft of trade secrets. Before entering private practice as a partner with Sidley Austin in New York, he was one of the original prosecutors with the Computer Crime & Intellectual Property Section of the United States Department of Justice and was involved with a number of the first prosecutions under the Economic Espionage Act. He is also the author of Intellectual Property & Computer Crime and a co-author of The Defend Trade Secrets Act of 2016 Handbook.

For more information or to contact Peter, please email him here.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 8 Comments comments.

  1. small inventor August 17, 2014 3:45 pm

    Very timely article, Mr. Toren,
    Let’s see, Alexander… the one who was proven to have told those blatant lies during his recent congressional testimony…..

    Knowingly submitting false patent applications is a felony under 18 USC 1001 and 35 USC 257e. Perhaps a few submissions to the FBI’s IPRC is in order. As a former US prosecutor, do you have any experience or recommendations working with the FBI’s IPRC website to report IP theft felonies via false statements to the USPTO?

    Side note: a friend is still waiting for the FBI to reply to his online submission over 2 years ago. Or should he call and camp out in the local FBI office with his wrapper file until heard?)

    TIA

  2. Benny August 18, 2014 7:13 am

    Having worked as a government employee in the defence/security sector, I’m left wondering where he could have found the spare time outside of working hours to concentrate on inventions.

  3. MaxDrei August 18, 2014 9:31 am

    Thank you Mr Toren.

    What does it take, to get to be a General? What does it take, to climb high enough to head up the NSA? Some chutzpah, that’s for sure. A huge capacity for self-righteousness and self-delusion?

    That he is the rightful owner strains credibility to bursting. That he even asserts it is amazing. But that’s only when one contemplation the technical field in which he made his alleged invention. Now if the field was clearing snow (or slurry) from his front lawn, it would be a different matter, wouldn’t it?

  4. Anon August 18, 2014 10:04 am

    I am not sure MaxDrei of the appropriateness of labeling anyone who has “climbed the ranks” the attribute of “A huge capacity for self-righteousness and self-delusion?

    Such is not necessary for this discussion, is it? Such is derogatory and rather pointless, unless your point is that ALL leadership (which must also exhibit the same characteristic of climbing the ranks) has that capacity for self-righteousness and self-delusion.

    As to subject matter, your comments there too are a bit off-base. Are you aware of the General’s area of expertise? Are you assuming that because he is a General, that he must only be a “manager” type, and not a “technical” type?

    A cursory check on his background reveals that he has: “an MS in systems technology (electronic warfare) and an MS in physics. See http://en.wikipedia.org/wiki/Keith_B._Alexander .

    Do you always “provoke” in such slipshod manner?

  5. Anon August 19, 2014 11:30 am

    Not that I really expected an answer from MaxDrei, but the lack of one does fit his pattern of posting without thinking to “provoke” and then responding only to those items that further his obvious agenda (or else, only responding with gamesmanship).

    J had a comment on a previous thread that correctly identified this type of blogging behavior: the blog troll. Plenty of sites for that behavior MaxDrei. Can we at least attempt to keep this site clear of that?

  6. Benny August 19, 2014 12:34 pm

    Anon,
    A wiser man than me once told me “You need two fools for a foolish argument “.
    I’m not for a moment accusing MaxDrei of being a fool – his style of writing indicates a thorough education, and he may well have good reason for distrust of high ranking officers – but he if does, as you say, post so as to provoke, silence may be your best strategy.

  7. Anon August 19, 2014 12:49 pm

    Benny,

    Thanks for the thought, but “silence” is a poor strategy when what I am after is dialogue.

    The better option is to point out the shameful behavior for what it is – sunlight being the best disinfectant.

    The type of dialogue identified and correctly labeled as blog trolling would be better off elsewhere. Silence by those wanting dialogue is not a great option. Gene does a great job here of curtailing the most obnoxious of blog trolling behaviors, but MaxDrei had a long history across multiple blogs of the type of posting that could be made acceptable with just a little additional effort and if he left out the games. What I point out here has no place in a dialogue, and if MaxDrei does have a point to make, some small amount of additional care to avoid the type of post I note above (for the reasons I provide) is not too much to ask for.

  8. Pro Se August 20, 2014 12:24 pm

    Overlooked in the apparent rush to opine on Alexander as an individual is the recital in all reports that the source of these claimed inventions is a third party somehow associated with his company. Nowhere is he quoted as declaring himself to be an inventor.