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innovation is benefited from today's patent system. Those benefits would be increased by the legislation before you.

Chairman KASTENMEIER. Thank you, Mr. Zeidman.

Mr. EDWARDS. It seems to me that what you are suggesting, regarding the personal grace period, could be regarded as a return to the first-to-invent system.

Mr. ZEIDMAN. No, Mr. Chairman; it is not intended as a return to the first to invent. It is suggested that the committee may wish to consider whether the benefits of existing grace period would be adequately taken care of by the preliminary application. A good deal of the answer to that question, of course, would depend upon the nature of the requirement for the preliminary application. It is quite possible that the preliminary application system would take care of the need to test and look more carefully into the potentiality of the product, which the grace period provides today. We are simply suggesting that the committee may wish to study whether the preliminary application system would adequately fill that need-a need, which we believe, is particularly important for a small firm.

Mr. EDWARDS. Thank you.

Mr. HUTCHINSON. Mr. Zeidman, how long should this grace period be?

Mr. ZEIDMAN. Well we don't suggest in our statement how long that period should be. I have heard suggestions ranging from 3 months to 6 months to a year. I would not-we are not suggesting a very lengthy personal grace period and we are not necessarily endorsing such. We are simply saying that there is such a period of time during which a small inventor may very well need to market test his product and to give further exploration to it and to experiment with it. And depending upon the nature of the preliminary application which is required, he may not be adequately taken care of unless there is some provision in that respect.

Mr. HUTCHINSON. Would this period of time, this grace period, run before his preliminary application was filed?

Mr. ZIEDMAN. Well Mr. Hutchinson if the preliminary application were indeed the short form which has been suggested it would be, then he could utilize that period between the preliminary application and the filing of the complete application in order to experiment, market test and so forth. If on the other hand, the preliminary application is required to be in effect the equivalent of a complete application, then there may very well be a need prior to that during which he can effectively experiment and market test. I might ask Mr. Davidson if he would like to comment further on this point.

Mr. DAVIDSON. It could, but if I may suggest sir, the grace period would not be a return to the first-to-invent rule because it would be personal to the inventor and the disclosure which the inventor would make during this grace period would bar the rest of the world.

Mr. EDWARDS. May I interrupt at the moment Mr. Hutchinson? Mr. HUTCHINSON. Yes.

Mr. EDWARDS. Wouldn't you be getting back into the same problems of proof that the judge was referring to, little notebooks as to whose grace periods were being utilized? You may have three or four grace periods going on throughout the country and each applicant would say his was first?

Mr. DAVIDSON. No, each inventor's disclosure before application filing would bar the other inventors.

Mr. EDWARDS. But you are getting back into that same burden of proof.

Mr. DAVIDSON. That does not follow, sir. If I may illustrate. A invents on Monday, B invents on Tuesday. A makes the disclosure, or publicly sells his invention on Wednesday. B does it on Thursday. They both file either preliminary applications or complete applications on Friday. It is immaterial which type application is filed. Neither one is entitled to the patent because A's Wednesday disclosure would bar B and B's Thursday disclosure would bar A. The only time the grace period would have any applicability is where there was no other public disclosure intervening before the filing of either the preliminary application or the complete application whichever came first.

Mr. EDWARDS. Thank you.

Mr. HUTCHINSON. I wonder if you would care to respond as to what you think a practical situation would be, even if we had the most simple kind of preliminary application required such as a short form. Of course it would have to be some kind of description of the claimed invention on that preliminary application and even if it were the shortest form, don't you suppose as a practical matter the small inventor or the small businessman would feel it necessary to employ legal counsel in order to assist him in the preparation of even a preliminary application?

Mr. ZEIDMAN. Congressman, that depends upon the form of preliminary application which would be required. It has been suggested that it could be simply a speech, or a letter would take care of it. On the other hand, at the other extreme it has been suggested that it could be virtually the equivalent of a complete application. I must tell you candidly that we have been watching this development and will continue to do so with regard to the preliminary application requirements. I am certainly hopeful that it would not be necessary for a small inventor to always require a patent attorney.

Mr. HUTCHINSON. I should suppose that it would depend too, upon the inventor. Some inventors would feel that they could adequately express their ideas in writing without assistance but I feel that a great many of them, no matter how simple you made it, would feel that it was necessary in their own interest to a fair description of what they claim even on a preliminary form to feel that they would have to employ counsel, I would suppose.

Mr. ZEIDMAN. I don't have any basis for agreeing or disagreeing with you and I would certainly not be surprised if that were the case. Mr. HUTCHINSON. One last idea I would like to get your reaction. to. The 20-year term running from the date of filing would tend to hurry things up in the Patent Office. Do you anticipate that there would be an increase in the number of interested applicants who would begin to blame the Patent Office for delays and call for additional forces of patent examiners? This would be true because this time would all be counted against their effective patent term. What I am suggesting is the possibility that as a result of this change, there would be an increasing amount of pressure upon Congress, to enlarge

the Patent Office staff and that sort of thing. Do you care to respond to that?

Mr. ZEIDMAN. This is a question which perhaps the Patent Office can more appropriately respond to. I would only say that there is already criticism of the Patent Office and of the existing system in regard to delays and I do not believe that the change which has been suggested here could be expected to substantially increase that kind of criticism. Indeed I would hope that some provisions of the bill in regard to expediting procedures, modernizing, studies, and so forth, would indeed increase the present efficiency and speed with which the Patent Office moves.

Mr. HUTCHINSON. Thank you.

Chairman KASTEN MEIER. Thank you Mr. Zeidman and Mr. Davidson for your appearance this morning.

The Chair would like to announce that hearings will continue on this bill tomorrow morning at 10 a.m. in this room. At that time we will hear from the following two witnesses: Henry J. Cappello, representing the patent committee of the National Small Business Association, and Mr. J. Rabinow, president of the Rabinow Engineering Division of Control Data Corp.

Until that time the committee stands adjourned.

(Whereupon, at 12:10 p.m., Wednesday, April 26, 1967, the subcommittee hearing in the above-entitled matter was adjourned.)

GENERAL REVISION OF THE PATENT LAWS

THURSDAY, APRIL 27, 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, the Honorable Robert W. Kastenmeier presiding.

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

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

Chairman KASTEN MEIER. The subcommittee will come to order for the further consideration of H.R. 5924, the Patent Reform Act of 1967, and in this connection the Chair calls as the first witness today Mr. Henry J. Cappello, representing the National Small Business Association and his colleagues whom I shall ask Mr. Cappello to introduce.

STATEMENT OF HENRY J. CAPPELLO FOR THE NATIONAL SMALL BUSINESS ASSOCIATION

Mr. CAPPELLO. Mr. Chairman and members of the subcommittee we appreciate this opportunity to present to the committee our views on H.R. 5924, the Patent Reform Act of 1967. I am Henry J. Cappello, consultant on patent policy to the National Small Business Association. I am also president of Space Recovery Research Center, Inc., of Boca Raton, Fla. With me, on my right, is Mr. J. P. Perry, president of Eastern Rotocraft Co., of Doylestown, Pa., chairman of the NSBA Patent Policy Committee; and on my left, Mr. Roy A. Patton, Jr., president of Multicon Division of Franklin National Investment Corp., Fort Wayne, Ind., a member of the NSBA Patent Policy Committee. While we do not agree with the report of the President's Commission in its entirety, we strongly support the objectives of the Commission as set out in pages 3 and 4 of the report. Of one thing there can be no doubt, changes are needed. The individual inventor and small businessman no longer derive from the patent system that measure of incentive, encouragement, and protection which promoted our tremendous growth and prosperity during the Industrial Revolution. In today's highly developed technology, the small inventor and businessman continue to make notable contributions to innovation. The Commerce Department Panel on Invention and Innovation, in its report, titled "Technological Innovation, Its Environment and Management," issued January 1967, sets out at page 16 the following findings:

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