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I would like to know why the reverse isn't true. Why, if it is held valid when it was tested, and it was appealed and held valid in the court of appeals, why shouldn't it be incontestable from then on? If the court decision is good for an infringer, why shouldn't it be good for the inventor? I am perfectly willing to go through the courts and settle it. If it is held valid, why can the infringer sue me a hundred times while I can sue only once? It seems to me that if you are going to introduce this kind of thing into the law, let it say that after it has gone through all the possible appeals and has been held valid, let it be valid for all times. That's usually another 10 years, or 5 years, or whatever is left. But let the proposed law not always be biased against the inventor.

I object to the deferred examination system because I think basically, it is a way of saving the Patent Office work by abandoning patents. Because if they are not abandoned, the Office will have no less work. You file a case and you defer it, and a little later somebody else comes in or you come in to pay the final fee and the Office has to prosecute the application as before. It seems to me that the case of my application at the Patent Office should be between me and the Office and no one else. I object to the fact that I can have 30 cases pending on deferred examination and then my competitor, let's say he is a rich competitor, comes in, pays the fees. Suddenly I find I have to prosecutē 30 patents all at one time, when I am not ready, when I can't afford the $500 that each case would take (at least). Suddenly my competitor forces me to prosecute patents which I was deferring. If we are going to defer patents, first of all, no third party should come in. This is none of their business. While I prosecute my application, they know the details of the case because it has been published.

The whole deferred examination is a myth and in no sense is it going to save me any work. My attorney still has to prepare a complete application. I think it is basically a way of publishing rather than issuing patents and I think that ordinary publications can be used instead of this. I think it is unfair to the small man because the small man will think he is going to save money. It is the kind of system where you file now and pay later-a credit system. Some have said to me: "After all you are a grown man, you know whether you want to prosecute the thing or defer for later.” I say that is an argument for gambling. Grown men gamble, grown men take heroin, this doesn't mean you should encourage this. I think the proposal is an encouragement to file and not pay.

In the case of my watch regulator if I had filed and not been able to sell the invention for 5 years, I would have abandoned it. As it was, I sold it 9 years later because the watch industry wasn't interested. The automobile industry was.

With the deferred examination you are encouraging abandonment. This is the reason I object to maintenance fees because they force the inventor to abandon applications. I object to anything that does this to the inventor. Let him pay when he is interested and be done with it. Let him get a patent. Don't make it harder and harder as the years go by. Seventeen years go fast enough.

I object to the whole business of deferred examination and I certainly object to it being instituted by either the Commissioner of Patents or the Secretary of Commerce. It should be your job, gentlemen,

to decide when the patent system gets changed. Let other screwball inventors come in and testify. It is your job to decide when the system should undergo changes, not somebody who wants to save on help and who doesn't know how to get more money from you. That is a problem, I admit. His job is to get the budget from you and if he cannot get the necessary budget, then he is going to ask you for changes in the patent system. He could even ask that you repeal the patent system, but that should be the Congress' duty, not the duty of the Commissioner of Patents or of the Secretary of Commerce.

I think that the patent system should be upgraded but you don't upgrade it by changing the laws in this way. These are merely legal matters. The way you upgrade it is to upgrade the people who administer it. This means you want better patent examiners, you must have more of them, and you should have more professionalism down there. Now they have to get so many cases done by Friday. I believe that what you should do is raise their salaries. There is no way of getting good people without paying them enough, except for Congressmen, Secretaries, and the President. They will work for nothing, but everybody else seems to want to get paid for their work. I think it is important that they get well paid for it.

If industry pays attorneys more money, then Congress will have to pay examiners more money. You will not get good patent examiners without this and unless you get good people, you are not going to have a good patent system. It does not make any difference what laws you write, the only way to get good people in a job like that is to pay well. You want good inventions--give the inventor the present 17 years; you want good examiners--pay them a good salary.

There are other patent bills that could be written which are not as radical as this, such as the bill before you, H.R. 7454, which is a rather straightforward bill to simplify the present patent system. This is an excellent bill which does not change the basic laws of the country.

We could write a million bills but I support the first to file only because I believe in international patents. I don't believe the present bill is particularly good and if I had a choice of letting it be passed completely as is, or abandoning the international prospect, I would abandon the international prospects. I believe the present bill is very unfair to the small companies, to the small inventor and unfair to all inventors, and I urge you not to pass it and not to recommend it in the present form.

And I want to thank you very, very much for listening to me.
Chairman KASTENMEIER. Thank you Mr. Rabinow.

I have just one question in view of the lateness of the hour. As an inventor is it your practice to pursue your own patents, or do you and have you exclusively used patent attorneys?

Mr. RABINOW. I have done both. We have a patent attorney at Rabinow Engineering. He has enough work because we emphasize patents. He works with us directly. I also have a private attorney because, occasionally Control Data lets me have some private rights on inventions which are outside their business when and where they feel they are not interested. And to keep the matters clear, I like another attorney to handle this. He does it on a commission basis. He has done well with

me so far, and he says some people play horses, he prefers to play Rabinow. That is his privilege. I have done my own cases completely, That is, I have written the specifications, the claims, and actually had the interviews with the examiners. But it usually does not pay to do this because often there are things you do have to know, particularly if you get involved in any difficulty. I prefer not to do it now. We don't even make our own searches, we use professional searchers. I think an inventor can file his own patent in simple cases. If you have a simple pair of pliers you can do your own, but if you have invented something complicated you have to use an attorney. Incidentally this is why the $10 fee doesn't trouble me. It is going to cost you $500 to get a patent through in the simplest case. So whether you pay $10 or $30 or $60 isn't going to make any difference to an inventor. I am not going to stop filing because of a $30 difference.

Chairman KASTENMEIER. You did open up another question. The witness that preceded you stated that the holders of large portfolios of patents are reaping the greatest amount of benefits from patents and should therefore bear a large portion of the total fees paid to the Patent Office. He recommended that a graduated structure of fees related to the total number of patents held or filings made, per annum, be incorporated into the fee structure. As a holder of a large portfolio of patents, what are your comments?

Mr. RABINOW. Well, my portfolios are not large compared to some large companies, because they hold thousands of patents. I think if they have large numbers, they paid more to the Patent Office, any way, and I don't think it would make any difference if you change the fees from $50 to $100. Even if they have to pay a maintenance fee when they file in Europe, I don't think it is going to make any difference.

The large companies, the IBM's, the General Motors, the General Electrics do license freely and they do not prevent the little inventor from making the patented article. I know of no case where a large company clobbers a little guy and I think this is because of the antitrust laws which are most effective. Large companies do have large numbers of patents but the protection that they need is internal. They do make a lot of money on their inventions but not by royalties.

As a matter of fact, one of the gentlemen from one of the largest corporations—I don't want to name any names--said that if the patent system were ended today these larger corporations would go on making their generators and their computers and everything else perfectly well without a patent system for a short time. After that the flow of inventions would start drying up. General Motors will make cars with or without patents, certainly in the immediate future.

Chairman KASTENMEIER. Mr. Edwards!
Mr. EDWARDS. No questions.
Chairman KASTENMEIER. Mr. Hutchinson.

Mr. HUTCHINSON. No questions at all, except I want to compliment the witness for what I feel has been a very helpful testimony.

Mr. RABINOW. Thank you very much.

Chairman KASTENMEIER. The Chair would also like to thank you for your very helpful testimony.

The Chair would like to announce that we have an executive meeting on Monday morning next at 10:30.

There will be no hearings that day,

The only hearing next week will be on Thursday next at 10 a.m. in this room at which time we will hear from Mr. John M. Malloy, Deputy Assistant Secretary of Defense for Procurement, and Mr. Francis C. Browne, president of International Patent and Trademark Association.

The committee stands adjourned until that time.
(Whereupon the hearing was adjourned at 12:25 p.m.)

GENERAL REVISION OF THE PATENT LAWS

THURSDAY, MAY 4, 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, Poff, Hutchinson, and Roth.

Also present: Herbert Fuchs, counsel, John W. Dean IIÍ, associate counsel.

Mr. KASTENMEIER. The committee will come to order for the further consideration of H.R. 5924, a bill for the general revision of the patent laws.

This morning the committee is pleased to have as its first witness Mr. John M. Malloy, Deputy Assistant Secretary of Defense for Procurement.

Mr. Malloy, welcome to the committee. Please identify your assistants and proceed, sir.

STATEMENT OF JOHN M. MALLOY, DEPUTY ASSISTANT SECRETARY OF DEFENSE (PROCUREMENT), ACCOMPANIED BY STANLEY NISSEL, OFFICE OF THE GENERAL COUNSEL, DEPARTMENT OF DEFENSE, AND ALBERT H. HELVESTINE, PATENT COUNSEL FOR THE DEPARTMENT OF THE ARMY

Mr. MALLOY. Mr. Chairman, I have with me today, on my left, Mr. Stanley Nissel of the Office of the General Counsel, Department of Defense, and on my right Mr. Albert H. Helvestine, who is patent counsel for the Navy.

The Chairman and members of the committee, I appreciate very much your invitation to appear before this committee to express the views of the Department of Defense on H.R. 5924.

The Department of Defense has an interest in the patent system for several reasons. Our security depends to a large measure upon an expanding technology, and technological progress is enhanced by the incentives inherent in the grant of patents.

Out of this technology has arisen the new and unique equipment with which to defend the Nation and to deter aggression. Moreover, the Department of Defense is a user of the patent system.

In the course of its operations, it conducts extensive research programs, both in its own saboratories and in those of contractors. This research often provides the environment for the conception of inventions.

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