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Inspection Report: IG-0547

March 22, 2002

Licensing of Trade Secrets by Sandia National Laboratories

The Office of Inspector General (OIG), U.S. Department of Energy (DOE), initiated an inspection into the facts and circumstances surrounding the issuance of a trade secret license in June 2000 by Sandia National Laboratories (Sandia) at Livermore, California, to Axsun Technologies (Axsun), a private company. This inspection was initiated after the OIG received allegations that the issuance of the Axsun license was in violation of both DOE policy and the requirements of Sandia’s management and operating contract. It was alleged that Sandia had been advised for many years that DOE policy prohibited the national laboratories from creating, maintaining or marketing trade secrets. The allegation suggested that the licensing of trade secrets by Sandia had been prevalent over the years, and that the Axsun license was only the most recent in a history of willful misconduct by the laboratory.