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 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 III, 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 laboratories and in those of contractors. This research often provides the environment for the conception of inventions. The Department of Defense is concerned with the efficacy of the system through which the Government's property interest in those inventions is secured. In addition to its own inventions, the Department frequently must utilize the inventions of others. As these inventions are often covered by patents, the Department is authorized to pay a reasonable royalty for their use. Any improvement in the quality of the patent, for example in such things as clear specifications and valid claims which properly define the scope of the inventor's contribution, would materially assist the Department in acting upon charges of patent infringement asserted against the Government. Patents also serve to document and disseminate detailed technical information, provide incentives for innovation, and secure recognition for creative individuals. The basic objectives of H.R. 5924 are to enhance the effectiveness of the patent system by raising the quality and reliability of U.S. patents and by reducing the time and expense entailed in obtaining and enforcing them. An additional objective is to accelerate the public disclosure of scientific and technological information. The bill which is now before this committee will, in our judgment, go a long way toward accomplishment of these objectives. The Department of Defense, therefore, strongly supports the bill. Mr. Chairman, I would like to comment on two specific aspects of the bill which are of particular interest to the Department of Defense and which we believe merit the attention of this committee. The first item relates to the prompt publication of technical reports generated within the Department of Defense and by our contractors. These reports are often a principal object of research and in many other cases they are an important byproduct of it. Such reports are public documents. To the extent that they are not classified for security reasons, or otherwise limited in distribution due to the inclusion of such things as trade secrets and proprietary data, the public is entitled to have access to them, and in fact, does have access to them through the Defense Documentation Center and the Department of Commerce. That these reports are made known to the public is, of course, consistent with one of our key objectives, of distributing new technology to the general public. A new feature of the patent system which the bill would introduce is the "preliminary application." Its purpose is to enable the applicant to establish an early filing date in the Patent Office prior to filing the "complete" application. As conceived, the preliminary application would be a document with minimum requirements as to form. At the same time, it is recognized that the preliminary application should contain a fair and adequate reflection of the technical details of the invention, since it is not contemplated that in the complete application he derive the benefit of the earlier filing date as to any matter not fairly reflected in the preliminary application. With the preliminary application on file, then, the applicant, without prejudice to his later complete application, could publish and freely discuss his invention. This, again, has the effect of getting information on new technology quickly before the public. The Department of Defense is strongly in favor of the preliminary application concept. It would be a valuable addition to the patent system. However, section 120 (a) (2) of the bill, closely paralleling the present law (35 U.S.C. 112 ) with respect to a complete specification, establishes the requirements which the preliminary application must meet if it is to protect the applicant. We note that under section 102 (a) of the bill a technical report published prior to the filing of the patent application may be cited as prior art against that application. With this fact in mind, and in view of the detailed requirements of section 120 (a) (2), inventors may be inclined to withhold or delay full and complete disclosure of inventions in technical reports, at least until a preliminary application incorporating a rather complete specification can be prepared and filed. This result would be, of course, inconsistent with the objective of stimulating the flow of new technology. A possible solution to the problem may be to provide the inventor with a short personal grace period-perhaps 6 months-against the prejudicial effect of his disclosure of the invention. By thus broadening the scope of nonprejudicial disclosure an inventor could reveal his invention in a technical report without thereby losing his opportunity to obtain a patent. Another area with which we are concerned relates to the provisions for security review of patent applications, as contained in chapter 17 of the bill, sections 181-188. The law presently in effect authorizes appropriate Government agencies, including the Department of Defense, to review patent applications. If the publication or disclosure of the invention would be detrimental to the national security, the Commissioner of Patents will order that the invention be kept secret. Willful disclosure in violation of a secrecy order carries a criminal penalty. Chapter 17 of the bill does not depart substantially from the corresponding chapter of the present patent law. However, under section 184 (b) of the bill the term "application" as used in chapter 17 includes only the complete application, thus affording the Commissioner no express authority to issue secrecy orders against preliminary applications. Under the bill an applicant who files a preliminary application on an invention of a sensitive nature need not file his complete application for a full year. During the intervening time his preliminary application would not be subject to the possible imposition of a secrecy order. Hence, it is possible that a privately developed invention carrying no official security classification, but which contains information of a sensitive nature, could be divulged by the applicant even while he has a preliminary application in the custody of the Commissioner of Patents, and potentially available for review. Hence, Mr. Chairman, we feel that the bill should provide that the Commissioner of Patents may impose a secrecy order on preliminary applications in appropriate cases. Mr. Chairman, this concludes my statement. I will be happy to respond to your questions. Mr. KASTENMEIER. Thank you, Mr. Malloy, and I compliment you on a statement that is concise and to the point and very useful to the committee. As I understand it, the Department of Defense supports the bill, but has two important qualifications. The first one is that you fear that elimination of the present grace period, even when coupled with a preliminary application, may discourage prompt publication of the results of technical research. Is that your view? Mr. MALLOY. In general, Mr. Chairman, that is correct. Mr. KASTENMEIER. Is this because published technical reports would constitute in your view prior art, unless and until embodied in an effective application, whether preliminary or complete? Mr. MALLOY. That is true. That would be the effect of the bill. Any prior publication would be prior art against any application, whether it is a preliminary application or a final application. Mr. KASTENMEIER. And I take it that you feel that, to be meaningful, a preliminary application would have to be fairly specific in terms of details, and would require a substantial amount of time in preparation? Mr. MALLOY. I believe that the bill as drafted does have this effect. It calls for essentially the same kinds of tests that are applicable now in the present law with respect to a complete specification, and because of this test it just may have the inhibiting effect that we mentioned. As we contemplated what the result of that would be, we thought that a solution to the problem would be the personal grace period applicable only to the man who did the publicizing. As I have studied this matter, I find it is necessary to weigh the many problems that are involved. There are plenty of problems with a preliminary application in terms of its administration, because the Patent Office and the Government have as their objective not to provide any more to a particular inventor than that which he has disclosed. If he does not disclose much, he does not get very much protection. The bill as drafted with respect to the preliminary application does, in our judgment, have a rather strict test which, it seems to me, could be overcome in part, or it could be potentially overcome wholly, I would judge, by the personal grace period. You could change the test of a preliminary application, as well, but the grace period seems to us to be a way to do it. Mr. KASTENMEIER. Do you think this concept of a personal grace period is consistent with the basic concept of the bill; namely, that the patent should go to the first to file? Mr. MALLOY. I think it is completely consonant with that objective. "First to file" is a system which I very strongly support, and which attempts to simplify greatly the present situation. It attempts to set up a time certain from which things then start to move; namely, the time of filing. |