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could appeal to our Board of Appeals; then into courts. So all of the applicant's rights would be fully protected, I believe, Mr. Congressman.

Mr. POFF. I have a series of questions, which time will not permit me to ask. I want to defer to my learned colleague from Delaware, but one final question.

I wonder if you feel that the Congress or the Commissioner of Patents would be the one who determines whether or not this experimental system of deferred examination procedure should be installed ?

Mr. BRENNER. Well, Mr. Congressman, the proposal of course, is that this be part of the legislation. This would be one of the matters that the Congress would have to consider, whether this should be included or not.

In effect, they would not be approving the institution of the deferred examination procedure at this point, but rather, the possibility that it would be in the future. It would mean, by putting it on a standby basis, that if the Patent Office could not maintain a high quality, immediate type of examination system, that then, this system could be instituted for a period of time in order to relieve some of the problems that result from the backlog.

Mr. POFF. I don't want to register an attitude about the merits or demerits of the procedure, yet I call attention to the fact that what is involved here is a little more than just deferral. We are making something of a substantive decision when we decide that we will empower the executive agency to make the decision-possibly properly, we should make that decision ourselves.

Mr. BRENNER. Well, Mr. Congressman, of course, the final decision on this rests with Congress as a result of the hearings and your deliberations.

Dr. HOLLOMON. I think the Congressman is asking whether he should delegate that responsibility.

Mr. POFF. Precisely.
Dr. HOLLOMON. I think there is a safeguard in the matter.

I think that the view of the President's Commission was that you might want to try it for a while, for a very narrow section of the art, to see whether or not it works or what difficulties you get into, rather than to go whole hog for such a conversion.

Certainly, knowing some of its deliberations, some members of the Commission felt we ought to go right now to a deferred system. Others felt we should not at all. I think we ought to watch the Dutch experience, and also, that the Commissioner under appropriate safeguards, should be able to institute at least on a narrow basis, without coming back to Congress—to answer your question.

Mr. Poff. Do you anticipate that it would be impractical to watch the Dutch experiment, and then come back to the Congress and ask for a statute on the subject at that time?

Dr. HOLLOMON. You see, one of the things you like to do, Mr. Congressman, is you like to try this—if you decide to try it-on only a section of the art.

I would not recommend at this stage of the game-even if the Dutch experiment were satisfactory and we were still further behind the wholehearted conversion to the whole system. I would want to try it for a while. I think such a trial allows the Commissioner an appro

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priate safeguard. I think the Congress can write in enough safeguards to allow him to undertake such a trial.

Mr. POFF. I thank you. I yield to the gentleman from Delaware.
Mr. KASTENMEIER. Mr Roth?
Mr. Rotu. I will limit my question to just one today.

As I understand the purpose of the patent system, it is to devote itself to the progress of useful arts. One question I have of Hollomon is, I was curious as to why that purpose was not included in the list of purposes of the bill on page 11 of your statement ?

Dr. HOLLOMON. Yes I say this, the reason is that the whole purpose of the bill in itself, is to maintain that purpose of the patent system, and these statements on page 11 were the explicit purposes of this particular piece of legislation. The whole fact that we come forward with legislation to strengthen the system is only for the fact that we believe that the patent system does in fact, contribute to the spread of science and the development of the useful arts. That is at present, the function of the whole system itself.

This may be just a semantic difficulty. We see, as the particular objective of this bill, the statement on page 11.

Mr. Roth. It just strikes me that it is sufficiently important that it is well worth being included, as you start out by saying, “These are the broad purposes of the bill.” It seems to me this would be the most important one.

Dr. HOLLOMON. These are the broad purposes of the bill insofar as they change the present legislation. I think that would be a fair statement.

Mr. Roth. That is all, Mr. Chairman.
Mr. KASTENMEIER. Thank you. Counsel has one last question.

Mr. Fuchs. Mr. Chairman, I would like to ask Commissioner
Brenner whether he is familiar with S. 1377 introduced in the Senate
by Senator Nelson?
Mr. BRENNER. Yes, sir. We are familiar with that particular bill.

Mr. Fuchs. This bill would authorize the Commissioner to establish search centers, would it not?

Mr. BRENNER. Yes, sir. That is at least one of the main purposes of that bill.

Mr. Fuchs. Do you approve of that?

Mr. BRENNER. Well, we believe that this proposal, by Senator Nelson, has considerable merit and we are presently taking certain steps to place our patented files on microfilm, which when accomplished, would make quite possible an opportunity like Senator Nelson is proposing,

We would be very happy to give serious consideration to this, and perhaps, it might be something to be considered as an addition to the proposed legislation we are talking about here today.

Mr. Fuchs. Thank you.

Mr. KASTENMEIER. The Chair would like to thank both witnesses, Dr. Hollomon and Commissioner Brenner for this testimony this morning

The Chair would like to announce that the next committee meeting will be on April 20 at 10 o'clock in this room, room 2226. The witnesses will be Donald S. Turner, the Assistant Attorney General, and Donald F. Hornig, Director of the Office of Science and Technology. Until that time then, the committee stands adjourned.

(Whereupon, at 12:30 p.m., the committee adjourned until Thursday, April 20, 1967, at 10 a.m.)

GENERAL REVISION OF THE PATENT LAWS

THURSDAY, APRIL 20, 1967

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE No. 3, OF THE
COMMITTEE ON THE JUDICIARY,

Washington, D.C. The subcommittee met, pursuant to adjournment, at 10 a.m., in room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier presiding

Present: Representatives Kastenmeier, Edwards, Poff, Hutchinson, and Roth.

Also present : Herbert Fuchs, counsel; and Donald G. Benn, associate counsel.

Chairman KASTENMEIER. The subcommittee will come to order for the further consideration of H.R. 5924, the patent law revision bill. The subcommittee is pleased to have as our first witness this morning the Honorable Donald F. Turner, Assistant Attorney General in Charge of the Antitrust Division, Department of Justice.

Mr. Turner, welcome to the committee. You may proceed, sir.

STATEMENT OF HON. DONALD F. TURNER, ASSISTANT ATTORNEY

GENERAL IN CHARGE OF THE ANTITRUST DIVISION

Mr. TURNER. Thank you, Mr. Chairman.

I am accompanied by Mr. Richard H. Stern, my colleague from the Antitrust Division.

I appreciate the opportunity to discuss with you a bill now being considered by this committee, II.R. 5924. This bill is the first complete revision of the Patent Act since 1836. As you know, the bill is based primarily on the recommendations of a Commission of leading American citizens, appointed by the President in July 1965, to study ways to insure that the patent system will be more effective in serving the public interest." When the President received the Commission's report last December, he directed the Commerce Department, the Justice Department, and his Science Adviser to consider it and to develop legislative proposals to carry out its objectives to the extent deemed appropriate. The patent reform bill of 1967 is the result of that review.

The bill, therefore, is the result of a committee effort. There has been agreement among us that the main thrust of the Commission's report should be incorporated in a Patent Code revision, as it is in this bill.

The Department of Justice strongly supports the objectives of the bill-(1) to improve the quality and reliability of U.S. patents; (2) to reduce the time and expense of obtaining patents; (3) to speed public disclosure of scientific and technological information; and (4) to move

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toward a more harmonious body of international patent laws. We support the implementing provision.

First, to discuss the issue of first to file.

The central feature of the proposed new Patent Act is the institution of a “first to file” system. This is the first recommendation in the report of the President's Commission on the Patent System. Under the firstto-file system, when two or more persons separately apply for patents, on the same invention, the patent is granted to the person who is first to file his application. Under the present system, when there are two applicants, the first one of them to file is, with certain exceptions, granted the patent, and an interference procedure is available to determine which one is the first inventor. The party who is last to file may prevail if he succeeds in proving that he conceived the invention first and diligently sought to reduce it to practice continuously until he was successful, when such diligence was commenced at a point in time before the other party conceived the invention.

As you know, the administrative proceeding in which relative priority between applicants is determined is called an interference. The law applicable to interference proceedings has become so complex and the procedures so complicated that the elimination provided for in the bill seems desirable. The procedure lends itself to collusion and fraud, as this committee's past hearings have indicated. The social benefits to be derived from our present interference system seem so minimal that they do not warrant, in our view, the high cost of maintaining the system.

The President's Commission found, and we believe, that a first-to-file system encourages prompt disclosure of newly discovered technology, and at the same time substitutes for the delay and expense of the complicated proceedings now necessary, a fair and inexpensive means by which an inventor can establish his priority.

The Commission stated that it believed, and we believe with it, that it is as equitable to grant the patent to the first to file as to the one who wins an interference. Moreover, it is more in keeping with the constitutional purpose of the patent system—"to promote the progress of the useful arts"—to reward with the patent the person who first makes available to the public the technological innovation in question.

Now, it may be thought that the bill, if enacted, would deprive inventors of the opportunity to develop their ideas more fully or test their commercial potentialities, before making patent applications. Under existing law, an inventor has a "grace period” of a year for public use, and he may conduct experimentation under secret or confidential conditions. The new law would not affect the latter type of experimentation, but it would make the former type a bar against the inventor's securing a patent. It has been suggested that inventors should be allowed some personal “grade period” such as 3 months or 6 months. The bill adopts the administratively simpler solution of doing away with the grace period.

Another suggestion is that an inventor who claims priority over the first to file should be able to assert it as a personal defense. In other words, he would not be entitled to a patent on this basis, but would in effect obtain a "shop right” to practice the invention. These suggestions may merit consideration by the committee.

This does not mean, however, that inventors will be unable to protect themselves during the period of time in which they perfect their inventions. The bill provides for preliminary applications, which inventors may use to secure a filing date for all the features of their invention which they disclose in it; later, they can file a conventional, complete application and secure a patent, after they have completed their marketing or technological studies. It is to be hoped that the Patent Office will develop short forms for inventors to use in filing preliminary applications, so that inventors will be able to secure the benefits of an early filing date without undue inconvenience. The Patent Office has indicated to us that they believe they can develop such procedures. We believe these measures will protect the interests of small inventors, who are particularly disadvantaged by the burdens and costs of the present interference system.

I turn now to the question of prior art.

Closely related to the first-to-file system is the Commission's recommendation, again part of the first one of its recommendations, that prior art shall comprise any information known to the public, or disclosed to the public, prior to the filing date of the application. Under present law, it is possible for an applicant to avoid the impact of prior art by filing an affidavit "swearing back” of the prior art. That is, the applicant asserts that he made the invention before the publication or public use that preceded his filing. It is believed that this procedure is highly conducive to the commission of fraud on the Patent Office. The problem is very similar to that involved in the fraudulent settlement of patent interferences, which the Supreme Court recently dealt with in the Singer Manufacturing Co. case, an antitrust prosecution brought by the Department of Justice. Moreover, the present system involves time-consuming consideration of affidavits, requires applicants to maintain extensive records to corroborate their affidavits, and generally creates uncertainty both in the Patent Office and among patent applicants as to their position.

I turn now to the question of upgrading quality.

The second major feature of the bill is the institution of a system that will make it possible for members of the public (1) to draw prior art to the attention of the Patent Office, in order to prevent the issuance of a patent which should not be issued, or (2) to secure the revocation of an already issued patent that never should have been granted in the first place.

To the first end, section 136 permits any person to notify the Patent Office about patents or publications having a bearing on the patentability of pending, published applications. The same section permits any person to notify the Patent Office if the invention claimed in the application was actually in public use or on sale before the effective filing date of the application, or that the inventor claimed to have made the invention did not really originate it. This procedure should go a long way to assist the Patent Office in sifting out applications for patents which would not meet the constitutional standard.

Section 257 permits any person, or any Federal agency, to petition the Patent Office to institute an administrative proceeding to revoke an invalid patent-provided action is taken within 3 years from the issuance of the patent. If the Patent Office finds that the patent should not have been allowed, then the owner of the patent is given an oppor

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