The rule followed by the Commission on harmonization was that to the extent that harmonization of U.S. practice with prevailing foreign practice can be attained without injury to the quality of the U.S. patent system, such harmonization should be introduced as a first step toward the desired goal.

H.R. 5924 contains a number of provisions which will make our patent system more compatible with foreign systems. If they are adopted, it should facilitate our initial steps toward the goal of international harmonization.

With closer cooperation among the various patent offices of the world, the businessman should be able to attain a reduction in the cost. of filing patent applications abroad where he desires multinational patent protection and he should also be able to look forward to the eventual attainment of a universal patent-one which would give the patentee a grant of exclusivity "good against the world."

One final point, gentlemen. You may have heard this before, but I believe it merits repeating.

The provisions for patent reform incorporated in H.R. 5924 are not intended as isolated or partial answers to disparate faults within the U.S. patent system, but are to be viewed as an integrated, coordinated plan for streamlining and improving that system. I believe that these changes are essential for the long-term health and the very survival of the patent system.

I sincerely hope that those who recommend against the provisions of H.R. 5924 at these hearings will do so constructively by proposing a better total system-should they have one to offer-rather than by making a piecemeal attack on the reform provisions set forth in this bill.

Gentlemen, that concludes my statement.

Mr. KASTENMEIER. Thank you, Mr. Birkenstock, for a very effective statement in support of the bill.

Are there any provisions of the bill you do not support or about which you have some reservations at the present time?

Mr. BIRKENSTOCK. There is only one minor point that has to be clarified, in my opinion. It is rather a detailed point but I think I must bring it out in response to your question. It can be easily corrected.

On page 26 of the bill, section 184, relates to filing an application in a foreign country. If this stands as it is, a patentee cannot file earlier than 6 months after filing his complete application. You can readily see that this reduces the period between the filing of a preliminary application and a complete application to 6 months.

Those who file a preliminary application and wait 12 months to file a complete must then wait an additional 6 months to file abroad under the provision as it is now written. In this situation they would lose their priority date abroad under the Paris convention which stipulates that a patent must be filed within one year following the filing of the first application on the invention.

So, I recommend that the change be made. This has been made. known to Commissioner Brenner by myself, and I think it can easily be taken care of.

My recommendation has been that the 6-month period be based upon either the preliminary or the complete. In other words, the applicant desiring to file overseas would have the right to file a complete for

eign application after 6 months from the filing of either the preliminary application or the complete application.

Other than that, sir, I would say that I fully support it.

Mr. KASTENMEIER. Just so that I understand you, Mr. Birkenstock, on line 31, page 26, how would you amend it? What language would you use on line 31 to accomplish this?

Mr. BIRKENSTOCK. The essence of it is, it says "A person shall not file or cause otherwise to be filed in any foreign country prior to 6 months after filing a complete application."

I would amend that. I am not a legal draftsman, sir, but I would amend it to say after filing either his preliminary or complete application in the United States.

Mr. KASTENMEIER. Thank you.

I am sure you know that many witnesses have argued that total elimination of the existing grace period, even when coupled with the privilege of filing a preliminary application, would unduly prejudice inventors.

Have you considered the possibility of instituting a short personal grace period?

Mr. BIRKENSTOCK. I have, sir. I don't agree with these people for the following reasons:

Many, many inventors today, all of those who wish to protect their inventions abroad, cannot resort to the grace period because they invalidate their foreign filing position.

The preliminary application was put into the Commission's recommendations to protect the small man who wanted to sample his market before he went to the expense of filing a patent application to protect him against himself-his own actions-to protect the university professor who, generally speaking, is not concerned about foreign rights and sometimes not any rights at all. It is usually the university administration that is concerned perhaps because the work may have been performed under a Government contract.

It is put in to protect that professor, let's say, against himself, yet enable him to be prompt in delivering a paper at a technical society meeting.

Now, I think that this route of the preliminary application is by far the more practical one than the personal grace period which, of course, would accomplish the same objective of protecting the socalled inventor or man with a conceptual idea against himself.

Mr. KASTENMEIER. On page 6 of your statement you suggest as one of the reasons for the present legal inadequacy of patents that we use a "classification system unlike that of any other patent system in the world."

Would you care to enlarge on this?

I don't know precisely how our classification system compares with other systems.

Mr. BIRKENSTOCK. Well, the plain facts of the situation are that we use a different coding and sectionalizing and categorizing of the patented art as contrasted to most other foreign country systems.

Therefore, every patent that is received by the Patent Office from abroad under reciprocal agreements with other governments has to be reclassified in accordance with our classification system in order to be readily drawn out of the file or readily referred to.

As I viewed it when I visited the Patent Office as a member of the Commission, the burden of reclassification, coupled with the pressure on the Examiner today, results in the simple situation in which the foreign patented prior art is stacking up unclassified-and this art has to be considered.

Now, the same thing is true in reverse. The foreign governments are having a difficult time classifying and reclassifying our art to conform to their system.

Mr. KASTENMEIER. And each other's systems?

Mr. BIRKENSTOCK. They are more in harmony. They have, almost all of them, gotten together on more closely related classification systems. We stand out apart from them.

There are movements under way today, through the meetings of our very, very intelligent and progressive Commissioner, to bring about some form of common classification system.

Whether you do it manually or whether you do it through a mechanized search system, this is highly essential to intelligent and full review of the prior art.

Mr. KASTENMEIER. Would enactment of the bill, as such, however, have any effect on the classification system used by our Patent Office? Mr. BIRKENSTOCK. I don't believe the bill, as such, has any effect. in promoting the steps towards classification.

However, the bill has this effect, and I know this from personal experience:

Our adopting a first-to-file system is an indication to the foreign governments that we are ready to meet them at least halfway. They are in a mood to compromise and I believe we are in a mood to compromise on the classification system.

I know from personal experience that the whole patent world outside the United States has been stimulated by this bill and looks upon it with eager anticipation, because they recognize they have the same problems basically that we do.

If I might add, there is nothing universal today about the patent systems of the world, with one exception, and that one exception is the difficulty of retrieving the prior art of the world. This is of vital import, not only to the patent offices of the world but to patentees and patent owners and business in general, because if it is inaccessible to the patent offices of the world, it is likewise inaccessible to the man or the comwith a conceptual idea.

pany

Now, at a point in time, he has to decide whether to patent or not to patent, and knows little of the odds that he has an invention over the prior art.

It is a truism that it costs an individual or a company just as much to prepare an application and prosecute it on an unpatentable invention as it does if it is a patentable invention. It costs the Patent Office just about as much to examine one as it does the other.

The accessibility of the world's prior art to prospective patentees would go a long way in taking the workload off the patent systems of the world, because the prospective patentee, himself, has a selfinterest in filing an application that is most likely to result in issuance of a patent, and he also has a self-interest in being able to shape his claims to avoid the prior art.

So, this is the common problem, the universal problem of the patent

systems of the world and it is certainly one of the key problems of the U.S. patent system.

Mr. KASTEN MEIER. Other than making our system somewhat more compatible with other systems, is there anything specifically in the bill which would promote the objective of establishment of a worldwide information retrieval system?

Mr. BIRKENSTOCK. Well, as I said, I think the first-to-file pushes us in this direction.

The Advisory Council of public members, set up to aid and assist the Secretary of Commerce with their recommendations as to steps to be taken to assess the quality and functional operation of the patent system, is incorporated in this bill and would help a great deal.

Mr. KASTEN MEIER. I would like to return to a further question I asked earlier and then I will conclude. This has to do with the personal grace period in context of the first-to-file concept. Politically, are we likely to run into a division between groups and inventors who are interested in domestic or academic exploitation of their patents and those who are international minded. That is to say, would those who are international minded prefer a pure first-to-file system without a personal grace period and would the others that I have described, the domestic or academic minded, prefer a personal grace period?

Is this going to be the split we are faced with objectively?

Mr. BIRKENSTOCK. I think it is one of the significant splits; yes. The provincially minded inventor that is not interested in foreign rights would prefer to have the present grace period. The inventor who is interested in protecting his inventions in other countries of the world cannot use the grace period today without jeopardizing his foreign rights, so he is giving up nothing.

Mr. KASTENMEIER. Thank you.

Mr. Edwards.

Mr. EDWARDS. No questions, Mr. Chairman.
Mr. KASTENMEIER. Mr. Poff.

Mr. POFF. Mr. Chairman.

Under section 102 of the present law, when a businessman is about to decide whether it would be profitable to exploit, the only prior art with which he has to concern himself abroad is that which is patented abroad or that which is described in a publication abroad; is that correct?

Mr. BIRKENSTOCK. That is correct.

Mr. POFF. Under this section 102 of the bill, he would have to concern himself as well with prior art which is not patented or not described in the publication but is simply known to the public.

Now, does this tend to increase or decrease his burden and simplify or complicate his decision?

Mr. BIRKENSTOCK. You are talking about the provision in the bill, if I am focusing on it right, whereby the inventor must be concerned about public use outside the United States.

Mr. POFF. Public knowledge outside the United States.

Mr. BIRKENSTOCK. And public knowledge outside the United States. This normally should not be a greater burden than he experiences today if he is interested in an international scope of his operation because he is most interested, of course, in what his international competition is doing as well as his local competition.

So, normally, he should be abreast of what is public knowledge in his field outside the United States and in what is in public use outside the United States.

Mr. POFF. How would you define the phrase "public knowledge" as it is intended in section 102?

Mr. BIRKENSTOCK. As a layman, I would describe it as knowledge that has been made available in some tangible form to the public; that it is not a public knowledge on the basis of Joe told John and John told Henry, but it is on the basis that the man had delivered a paper at a technical forum or at a trade association meeting, an exposition, and this type of thing.

Mr. POFF. You addressed yourself to section 136 which has to do with the reexamination after publication.

Mr. BIRKENSTOCK. Yes, sir.

Mr. POFF. How do you define in subsection (a) "any person"?
Mr. BIRKENSTOCK. This is the bill?

Mr. POFF. Yes, sir; on page 18 of the bill.

Mr. BIRKENSTOCK. How do I define "any person"?

Mr. POFF. Yes, sir.

Mr. BIRKENSTOCK. Anyone who has an interest in bringing to the attention of the Patent Office, be it an individual or a company, that prior art exists that would invalidate the avowed claims of the application that was published.

Mr. POFF. This would include both American Nationals and Nationals of foreign countries?

Mr. BIRKENSTOCK. Most definitely, I think.

Mr. POFF. Under present law, does the National of a foreign country have the right to issue a similar challenge?

Mr. BIRKENSTOCK. He can come into our courts, sir.

Mr. POFF. But his challenge is not similar?

Mr. BIRKENSTOCK. There is no provision under the present law for public citation of art. He has got to cite it by a declaratory judgment action or some other action, or find some other means of introducing the prior art as a challenge to the issued patent.

Mr. POFF. Just in order that we might have this convenient in the record, Mr. Chairman, I will dictate into the record the definition of the word "person" as it is found in chapter 1 of title I of the Code:

"The words 'person' and 'whoever' include corporations, companies, associations, firms, partnerships, societies and joint stock companies as well as individuals."

Now, if I may pursue another line briefly.

How do you think the system of deferred examinations would affect the cause of early disclosure if it were implemented by the Patent Office?

Mr. BIRKENSTOCK. Well, it would promote early disclosure.

One of the problems facing a patentee, of course, is to make the grand decision as to whether he is going to go through a full examination step or not. The deferred application route gives him an opportunity to take a greater degree of time in determining whether or not he is going to invest more heavily in protecting his concept based upon the market and the commercial value which may be known only later rather than at an earlier date.