Secrecy Power Sinks Patent Case

[David Farber <dave () farber net>]

Begin forwarded message:

From: EEkid () aol com
Date: September 22, 2005 9:27:32 PM EDT
To: dave () farber net
Subject: Secrecy Power Sinks Patent Case



Secrecy Power Sinks Patent Case



By Kevin Poulsen

02:00 AM Sep. 20, 2005 PT

When New England inventor Philip French had his epiphany 15 years  
ago, he didn't dream it would lead to an invention that would be  
pressed into service in a top-secret government project, or spawn an  
epic court battle over the limits of executive power. He was just  
admiring a tennis ball.

The ball's seam, with its two symmetrical halves embracing each other  
in a graceful curve, intrigued him. "I thought, my god, I bet you can  
do something with that kind of shape," he recalls. He was right.  
French and two colleagues went on to design and patent a device now  
called the Crater Coupler, a simple, foolproof connector for linking  
one pipe or cable to another without nut threads or bolted flanges.

The device is interesting on its own, but the broader legal legacy of  
the invention may be more important. In a little-noticed opinion this  
month, a federal appeals court ruled against the Crater Coupler  
patent holders and upheld a sweeping interpretation of the  
controversial "state secrets privilege" -- an executive power handed  
down from the English throne under common law that lets the  
government effectively kill civil lawsuits deemed a threat to  
national security, even if the state is not a party to the suit.

The ruling is notable as a rare appellate interpretation of the state  
secrets privilege as it applies to patent holders. As such, it is a  
potentially worrying development for inventors -- particularly those  
developing weapons, surveillance and anti-terror technologies for  
government contractors -- who may find infringement claims dismissed  
without a hearing under the auspices of national security. It also  
offers a fascinating, if limited, view into the machinery of official  
secrecy at a time when the privilege is being exercised as never before.

"It's the most powerful privilege the government has," says William  
Weaver, senior adviser to the National Security Whistleblowers  
Coalition. "It's the nuclear option. It never fails."

French says he and his partners -- Charles Monty and Steven Van  
Keiren -- got the first inkling of a national security application  
for the Crater Coupler a decade ago. While shopping the new design  
around to "a whole mess of quick-disconnect companies," the trio  
received an intriguing inquiry from Lucent Technologies, the  
reincarnation of the legendary Bell Labs research center, and at that  
time still part of AT&T.

Lucent wanted to evaluate the Crater Coupler for use as a fiber-optic  
"wetmate" -- an airtight connector for two fiber-optic cables  
designed to operate underwater. It was part of a contract with a U.S.  
government agency that, the company said, would have to remain  
unnamed. "It was a secret black job, they couldn't divulge what it  
was for," says French. "Who it was for, the Navy or the CIA, or who  
knows, they never said."

A Lucent spokesman confirmed that the company had contact with French  
in 1995, but wouldn't discuss the details, citing government secrecy  
concerns.

But according to French, the inventors agreed to help Lucent try to  
adapt the Crater Coupler to the company's needs, with the expectation  
that Lucent would license the group's patent if it all worked out.  
The inventors sent over plans, sketches and a model, and French began  
consulting and advising a Lucent engineer in monthly phone calls.

After about a year of development and testing, Lucent had good news  
for the inventors: The device passed all the tests, shaming a  
competing, clunky design that French says resembled an old thermos.  
But when the inventors got on the phone with Lucent's lawyers to  
discuss license terms, the company dropped a bomb. "Almost the first  
thing they said was, 'Well, we don't have to do anything, because  
this is under some sort of provision for military secret stuff where  
we don't have to pay anything,'" says French.

French felt betrayed. "This was after a year of encouragement, with  
me helping them and them informing us of their progress," says  
French. "That was one hell of a shock."

Lucent eventually offered the inventors $100,000 for the right to  
produce 1,000 wetmate couplers. The offer caused a rift between  
French and his partners: They wanted to make a counteroffer of  
$500,000, but French -- in his 60s and recently retired -- wanted to  
take what was on the table. "I said, well, Lucent doesn't have to do  
a thing, so why don't we take $100,000 and be happy with that?"

Unable to agree, French's partners bought him out for a flat $30,000.  
"I used some of the money to have a garage built," French says.


Lucent rejected the remaining inventors' counteroffer, and in 1998  
Monty and Van Keiren, now incorporated as Crater Corp., filed a  
federal lawsuit in eastern Missouri against Lucent alleging patent  
infringement, trade-secret theft and breach of contract. Crater's  
attorney, Robert Schultz, says there's a question of basic fairness.  
"Lucent's made a ton of dough, and my clients are out in the cold,"  
says Schultz.

The patent-infringement portion of the case has since been dismissed,  
under a federal law that says a company can't be sued for  
infringement if the development was for the exclusive use of the  
government.

After a year of pretrial wrangling, the case had progressed to the  
point that Schultz could start subpoenaing documents to support his  
claim, when the government intervened to assert the state secrets  
privilege.

Never passed by Congress, the privilege has its roots in English  
common law and was cemented into American jurisprudence by a landmark  
1953 Supreme Court case titled U.S. v. Reynolds. In Reynolds, the  
widows of three men who died in a mysterious Air Force crash sued the  
government, and U.S. officials tried to quash the lawsuit by claiming  
that they couldn't release any information about the accident without  
endangering national security. The Supreme Court upheld the claim,  
establishing a legal precedent that today allows the executive branch  
to block the release of information in any civil suit -- even if the  
government isn't the one being sued.

According to research by Weaver, an associate professor of political  
science at the University of Texas, the government invoked the  
privilege only four more times in the next 23 years. But following  
the Watergate scandal, the executive branch began applying state  
secrecy claims more liberally. Between 1977 and 2001, there were at  
least 51 civil lawsuits in which the government claimed the state  
secrets privilege -- in every case successfully.

"There was more oversight of presidential activity" after Watergate,  
says Weaver. "In response to that, I think presidents resorted to the  
state secrets privilege to keep that oversight from cramping their  
style."

Under Reynolds, the head of a federal agency must personally  
intervene to invoke the privilege. In Crater v. Lucent, it was  
Richard J. Danzig, then-secretary of the Navy, who did the honors. In  
a March 1999 declaration, Danzig claimed that permitting Crater to  
pursue a legal inquiry into the government's alleged use of their  
coupler would tip off U.S. adversaries to certain highly classified  
government operations and "could be expected to cause extremely grave  
damage to national security."

"Those operations and programs are currently ongoing," Danzig wrote.  
"It is therefore my opinion that disclosure of information concerning  
them would permit potential adversaries to adopt specific measures to  
defeat or otherwise impair the effectiveness of those operations and  
programs."

Judge E. Richard Webber granted the government's request immediately,  
and blocked the Crater inventors from obtaining any information from  
Lucent or the feds about the government's alleged use of the Crater  
Coupler or any other coupling device. In the legal battle that  
followed, it emerged that the order covered an astonishing 26,000  
documents -- some of which were not only unclassified, but had  
already been entered into the public record. In 2002, Webber examined  
those documents in chambers, and concluded that not one of them would  
be available for Crater's use in pressing its case.

Schultz turned to the Federal Circuit Court of Appeals. This month a  
divided three-judge panel ruled (.pdf) that the lower court had  
properly applied the state secrets privilege. "I would have thought  
that courts would be more hesitant to apply it to the patent area,  
but in this case there was no hesitancy whatsoever," says Weaver.

In a dissenting opinion, Circuit Judge Pauline Newman wrote that the  
ruling efficiently killed Crater's lawsuit, and argued that a saner  
solution would have been to proceed with the case behind closed doors  
-- a procedure already used to protect classified information during  
criminal espionage prosecutions.

"Although there may be areas of such sensitivity that no judicial  
exposure can be countenanced -- such as, perhaps, the formation of  
the Manhattan Project -- there is no suggestion that the sensitive  
information concerning the Crater Coupler cannot be protected by well- 
established judicial procedures for preserving the security of  
sensitive information," Newman wrote.

Schultz argues that the secrecy order shouldn't apply to documents  
concerning an unclassified presentation that Lucent held in which it  
allegedly showed off the Crater Coupler. He plans to ask for a  
rehearing of the appeal but claims to be optimistic that the case can  
proceed with or without access to the evidence.

If so, it would be a rarity, says Steven Aftergood, director of the  
Federation of American Scientists' Project on Government Secrecy.  
"The privilege has worked very effectively for the government," says  
Aftergood. "In almost every case where they've invoked it, it leads  
to the termination of litigation."

Indeed, the list of cases in which the state secrets privilege has  
been invoked seems a pantheon of injustice. The privilege was upheld  
in 1982 to prevent former Vietnam War protestors from learning more  
about an illegal CIA and NSA electronic surveillance effort that  
targeted them during the 1970s. In 1991, it was used to stop a  
lawsuit by a banker who'd unwittingly been roped into an illegal CIA  
money-laundering operation, and who claimed the agency had ruined his  
career when he tried to get out.

In 1998, workers at the Nevada airbase known colloquially as Area 51  
were blocked from learning what chemicals they'd been exposed to  
during illegal burning of toxic waste by base administrators.

In 2004, the Bush administration resorted to the privilege to silence  
former FBI translator Sibel Edmonds, who said she was fired from the  
bureau after reporting security breaches and misconduct in the  
agency's translation program. And in perhaps the most disturbing  
case, this year the Justice Department asserted the privilege to kill  
a lawsuit by Maher Arar, a Syrian-born Canadian citizen who, in 2002,  
was picked up by U.S. officials as a suspected terrorist while  
changing planes at JFK, and promptly shipped off to Syria for a year  
of imprisonment and torture.

"Here's a guy who was a victim of a crime, that is, kidnapping, who  
was sent by us to a foreign country to be tortured to get information  
for us," says Weaver. "That violates all kinds of laws and the  
Convention Against Torture and who knows what else."

Weaver says the state secrets privilege is a blunt instrument that  
too often utterly obliterates any further inquiry by the plaintiffs  
in a civil case. "I'm not saying it's always invoked for evil  
purposes -- it almost certainly is not. But we can't tell when it is,  
and that's the problem." He faults Jimmy Carter for being the first  
president to use the privilege with frequency, and George W. Bush for  
using it systematically. "This presidency is the first one in history  
to use the secrecy privilege in a programmatic, organized  
comprehensive policy," Weaver says. "It's the first secrecy presidency."

"It effectively shuts down the judicial process," says Aftergood. "It  
tells people that they cannot have their day in court because  
national security will not permit it, and that's a terrible message  
to send."

Justice Department spokeswoman Cynthia Magnuson says the department  
generally doesn't comment on how the state secrets privilege is  
applied. "The only thing I can say is it's applied if appropriate  
only," she says.


But if the outcome sometimes seems unjust, it's a necessary trade-off  
to preserve national security, says Washington attorney Shannen  
Coffin, a lawyer at Steptoe and Johnson and a former U.S. deputy  
assistant attorney general from 2002 to 2004.

"That is the balance the court has struck in certain circumstances,"  
says Coffin. "A lawsuit that relates to monetary damages isn't nearly  
as important as protecting the security of the American people."

While at the Justice Department, Coffin was involved in several cases  
asserting the privilege. "I've been in meetings with cabinet  
officials that have invoked the privilege, and they don't take it  
lightly," Coffin says.

If there's been an increase in the exercise of the privilege, "It is  
simply a recognition that information is a weapon in the modern day  
and age," says Coffin. "And that is a serious concern for national  
security."

Coffin says bold action, like withholding 26,000 documents in the  
Crater case, is sometimes necessary to prevent a U.S. adversary from  
compiling bits and pieces of seemingly harmless, unclassified  
information into a state secret. That "mosaic theory" of national  
security is frequently cited in litigation surrounding the privilege,  
and Department of Justice attorney Lisa Olson raised the argument in  
the Crater case last year.

"The more information that is disclosed, the easier it becomes to  
disclose more, and soon the floodgates are opened and nothing is  
secret," Olson told Judge Webber.

A Navy spokeswoman declined to comment on the Crater case, but  
outside experts say it's easy enough to guess the nature of the top- 
secret project the government is protecting. "It's all but self- 
evident that it has to do with the clandestine monitoring of fiber- 
optics communications cables on the ocean floor," says Aftergood.

"They've been interested in it since the first fiber-optic cable was  
ever invented," says James Bamford, author of two books on the NSA.  
"It's clear that they have a major operation in terms of tapping into  
sea cables."

Fiber-optic cables were well on their way to supplanting less-secure  
communications technologies at the time that Lucent approached the  
Crater inventors, and it's been widely reported that the switch  
threatened to cut off the electronic spies at the NSA. "There's been  
this huge shift from using satellite communications, which is very  
easy to tap into, to using both terrestrial and transoceanic fiber- 
optic cables, and that's presented a major problem for NSA," says  
Bamford.

To counter that problem, and keep the electronic intelligence  
flowing, NSA has reportedly developed sophisticated techniques for  
wiretapping undersea cables, relying on specially equipped Navy  
submarines, the most advanced of which is the newly recommissioned  
USS Jimmy Carter, fresh from a $1 billion upgrade that reportedly  
includes state-of-the-art technology for tapping into undersea fiber- 
optic communications.

French, now 74 and living in Maine, is not a party to the case since  
his partners bought out his interest in the invention. But he still  
has bad feelings over the affair.

"If it had been war time, World War II, I'd have given it to them.  
But if they're hiding behind some friggin' law, basically to screw  
somebody...." says French, trailing off.

Lucent spokesman John Skalko says the court's secrecy order prevents  
him from addressing the inventors' claims in depth. "We deny any  
breach of contract or any misappropriation of trade secrets," says  
Skalko.

"You can't try this case in your publication, it's only to be tried  
in a court of law," Skalko adds -- a prospect that seems increasingly  
unlikely.



http://www.wired.com/news/technology/0,1282,68894,00.html? 
tw=wn_story_page_prev2

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