Key Takeaways

  • Classified patents are issued under secrecy orders to protect national security and are not published publicly.
  • The Invention Secrecy Act of 1951 authorizes the U.S. government to withhold patent grants and impose confidentiality on certain applications.
  • Agencies like the DoD, DOE, and NASA play a key role in identifying inventions that require classification.
  • Dual-use technologies and innovations with potential military application are primary candidates for classification.
  • Patent Security Reviews are conducted by defense agencies to assess national security risks before a patent is granted.
  • Filing a patent that may be classified has legal, strategic, and financial implications—including potential delays, compensation, and restrictions on foreign filing.
  • Classified patents may be maintained for decades or declassified once they no longer pose a threat.

Classified patents are protected under a secrecy order which prevents the award of a patent, puts restrictions on filing for a foreign patent, and mandates that an invention be kept secret. Additionally, classified patents follow specific procedures in order to prevent any disclosure of ideas detailed in an application.

Secret Patents

In 2017, the United States Patent and Trademark Office (USPTO) reported statistics that there were over 5,700 classified patents held by the United States government. These inventions are highly guarded under sensitive secrecy orders. The public may never know more about these classified inventions, but some once-secret patents included a laser-tracking system, a stronger net, and a warhead-production method.

Invention secrecy dates back to the 1930s, but exploded in the 1940s when nuclear weapon development became a highly classified topic. Under the Invention Secrecy Act of 1951, federal law prevented the disclosure of new technologies and inventions that may present a national security threat to the United States.

Under this act, the commissioner of the USPTO was permitted to flag patent applications for review by American government defense agencies in order to keep certain inventions classified. This invention secrecy could even apply to ideas and products developed by private citizens. Patents that qualified for a secrecy order were made available only to defense agencies, were restricted from being exported, and were deemed classified.

A secrecy order can be appealed by a patent holder. However, the power to rescind the order lies in the hand of the agency that made the request. Typically, those that would make that decision would include the following agencies:

  • Air Force.
  • Army.
  • Department of Energy.
  • NASA.
  • National Security Agency.
  • Navy.
  • Justice Department.

How Patent Security Reviews Work

Before a patent application is granted, it may undergo a patent security review by the Defense Technical Information Center (DTIC) or the Defense Technology Security Administration (DTSA). This review determines whether the technology in the application poses a risk to national security. If so, the USPTO issues a secrecy order, suspending publication and patent grant until further notice.

Key elements of the review process include:

  • Coordination with defense agencies such as the DoD, DOE, NASA, and NSA.
  • Evaluation of potential military or dual-use applications of the invention.
  • Flagging technologies with sensitive defense implications, such as autonomous systems, quantum computing, or satellite communications.

Security reviews are essential in maintaining technological superiority and safeguarding against unauthorized disclosures.

Kinds of Inventions That Are Included in Secret Patents

It is believed that most classified inventions include technological advances utilized in weapons systems for United States military services because most requests for classified patents appear to be quickly granted. Many of these patents originate from military contract work, but not all of them do. Generally, most investors do not object to secrecy orders, however some have requested and received financial compensation due to claimed losses from previous secrecy orders.

Dual-Use and Commercial Implications of Classified Patents

Many inventions classified under secrecy orders are dual-use technologies—those with both civilian and military applications. For instance, advances in AI, GPS, or drone technology may be useful for agriculture or logistics but also serve as critical military assets.

Implications for inventors and businesses include:

  • Inability to commercialize the invention until the order is lifted.
  • Prohibition on foreign patent filings, which can restrict global expansion.
  • Limited disclosure, even to potential investors or collaborators.
  • Possible compensation from the government for lost commercial opportunity due to classification.

These limitations often lead inventors to consult legal counsel before pursuing patents in sensitive areas.

Where Are Patents Classified on the Balance Sheet?

A patent gives a patent holder exclusive rights to use a design, process, invention, or any other intellectual property. It is the responsibility of the USPTO to review all patent applications and grant patents. This provides companies and individuals monopoly rights for an established number of years. On a classified balance sheet, patents are placed in the intangible assets subsection.

Intangible assets are a part of the long-term assets subsection. Intangibles include the following:

  • Copyrights.
  • Patents.
  • Trademarks.
  • Franchise licenses.
  • Goodwill items.
  • Other nonphysical items that do not have a set market value.

Companies often use intangible assets in order to encourage long-term economic benefits. This is because intangible assets are frequently used for extended periods of time and they are not easily converted into cash. Patents have a similar accounting process as other fixed assets. Businesses must amortize or allocate the costs for the life of the patent. Costs affiliated with patents include documentation, registration, and any legal fees in the event of unauthorized use.

Typically, research and development expenses are not associated with the cost of a patent. Instead, they fall under operating expenses. It is recommended that businesses utilize the straight-line approach to amortize intangible assets when the amortization cost is the same every year. To clarify, if a business obtains a 10-year patent at a cost of one million dollars, the yearly straight-line amortization expense is about $100,000.

Financial and Strategic Considerations of Classified Patents

Although patents are generally considered intangible assets, classified patents present unique valuation challenges. They may not generate immediate revenue, and their existence may not be disclosed publicly, making it harder to assess their market value.

Strategic considerations for businesses holding or developing potentially classified technology include:

  • Weighing the tradeoff between secrecy and exclusivity (a patent grants public monopoly rights but requires disclosure).
  • Understanding timelines—a secrecy order can delay patent issuance indefinitely.
  • Preparing for export control regulations, such as the International Traffic in Arms Regulations (ITAR) or Export Administration Regulations (EAR).

Companies working in defense-related fields often develop internal protocols to identify innovations that might trigger classification reviews early in the R&D process.

Examples of Secret Patents in the U.S.

A secrecy order is applied to a patent if the USPTO staff and their military advisers consider the idea a potential threat to national security. A patent will not be published until the technology is considered to no longer pose a threat.

Inventions related to uranium enrichment, cryptography, and chemical and biological weapons are typically made secret. Additionally, harmless inventions that could be considered to be “dual-use” could fall under a classified patent. A good example is an airborne crop duster which could be used to spread biological weapons.

Duration and Declassification of Secret Patents

Secrecy orders are not necessarily permanent. They are reviewed annually by the relevant agencies. A classified patent may be declassified once the invention no longer poses a risk to national security or if similar technology becomes public.

Some patents remain classified for decades. Others are declassified and granted years after their initial application, making them eligible for traditional protection and commercialization.

Inventors can petition for the removal of a secrecy order, but the decision rests solely with the agency that requested it. If successful, the USPTO will resume processing the application as a regular patent.

Frequently Asked Questions

What is a classified patent? A classified patent is a patent application that the U.S. government has placed under a secrecy order due to its potential impact on national security.

How long can a patent stay classified? There is no fixed period. Secrecy orders are reviewed annually but can remain in place indefinitely if the invention continues to pose a security risk.

Can I still file for a foreign patent if mine is classified in the U.S.? No. Secrecy orders prohibit the filing of foreign patents without government approval.

What technologies are most likely to be classified? Military systems, dual-use technologies (like drones or encryption), nuclear energy, space tech, and AI applications are most commonly classified.

Can I be compensated for a classified patent? Yes. If classification delays or restricts your ability to commercialize the invention, you may be eligible for government compensation.

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