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velopments or come up with his own improvements. This will all make, I think, for a better technological society.

Mr. Poff. I understand from your testimony that you favor, apparently without reservation, the concept of universal prior art as that is defined in section 102. Is that correct?

Mr. NEUMAN. I favor the extension of the prior use bar to foreign countries. If you want to call that universal prior art, we do have at the present time universal prior art in the sense that publication anywhere in the world is a bar to a patent in this country.

Mr. POFF. It would take a lawyer to recognize the careful language you choose in answer to my question, and I am a lawyer. I am not a patent lawyer and no member of the subcommittee is a patent lawyer. Contrary to the criticism that courts should have expertise in this field to render justice, if that was applicable then this subcommittee would be incapable of drafting laws with respect to expertise, but your answer was not quite responsive to my question.

Mr. NEUMAN. I am sorry, sir. In 102 of this bill we say “was known to the public."

Mr. PoFF. Yes, sir.

Mr. NEUMAN. "Or made available to the public by means of a disclosure in tangible form or in public use or on sale."

Mr. PoFF. Yes, sir.

Mr. NEUMAN. That means anywhere in the world according to our recommendation.

Now “known to the public” means that it was known in the sense that it could be reproduced, that there was enough knowledge extant so that any man skilled in the art, on the basis of that knowledge, could reproduce this invention.

Mr. Poff. Is that a term of art? Are those words defined as you have just defined them in case law, “known to the public"?

Mr. NEUMAN. We have in the present law something very close to “known." I don't think it says "known to the public." I think the present law simply says “known," either in 102 (a) or (b).

Mr. POFF. I will read that, if I may, into the record. Present law, section 102: A person shall be entitled to a patent unless (a) the invention was known or used by others in this country or patented or described in a printed publication in this or in a foreign country before the invention thereof by the applicant for patent.

Mr. NEUMAN. I think we have improved on the present section because the present section simply says “known” and we had quite a discussion about it. We thought "known” should be spelled out as not simply known to one person but known to the public. Then we went on to say, “or made available to the public by means of a disclosure in tangible form.”

There we were thinking of a tape recording of an oral disclosure made at a scientific meeting. That would be the tangible form of the knowledge that we had in mind. I think we have improved on the present section because it says "known" and this could mean anything. I think the decisions, however, have construed the word known as we now have it in the law to mean known generally and not simply known to one person who has just kept it in his head and has not made it available to the public.

Mr. Porf. The word "known" in the present law has application only within the United States. The words "known to the public” in section 102 of the bill would have application worldwide.

Mr. NEUMAN. Yes, sir.

Mr. PoFF. Do you think that extension of the definition of prior art would increase the validity of patents?

Mr. NEUMAN. I think it would because under the present law we are limited to the public knowledge in this country. If there is provable public knowledge in the foreign countries this should be applied against a U.S. patent so that it does not represent a limited type of monopoly which we have in this country. In other words, it is not a valid patent if there is this provable public knowledge in a foreign country.

Mr. Poff. Do you think that the new language with its worldwide application would encourage or discourage the commercial exploitation of the patent, bearing in mind the possibility that any person in the world, after the grant of the patent and after the investment of the entrepreneur, might produce prior art which was not known at the time the patent was granted ?

Mr. NEUMAx. I think it is a matter of degree. This very thing you are talking about can happen so far as American public knowledge is concerned. It is simply a question of just how much more disastrous is it if you could bring in foreign public knowledge to invalidate a patent. But the disaster can come, sir, right within this, and I have seen it happen many times, a patent has been granted, investments have been made and then, lo and behold, someone turns up a prior public use that invalidates the patent. I think it is a matter of degree. We have simply recommended extending the danger that exists today with respect to a patent.

Mr. Poff. Well, it rather substantially enlarges the scope of the danger, does it not?

Mr. NEUMAN. It does that.

Mr. Poff. And that might possibly discourage investment. If it does I wonder if that does promote the constitutional purpose.

Now my next question is somewhat related to that. Would you care to discourse for the record on why you think recommendation XXII would promote the constitutional purpose?

Mr. NEUMAN. I sat up until 2:30 this morning writing a speech that I am going to deliver next week before the Practicing Law Institute in New York on that very subject, so I should be able to provide a form of discourse.

The Commission was interested in upgrading the patent system. The Commission was interested in improving the quality and the reliability of patents. It seemed to us that if you are going to have a good patent system with good high quality patents, that the patent grant should not be a bundle of uncertain rights which I feel is the attitude of the Department of Justice. They will acknowledge that the patent grant is proper and they will acknowledge that the patentee has certain privileges. But I think they claim for the Antitrust Division of the Department of Justice the right to whittle away at the patent grant as it pleases.

We on the Commission felt that there should be a statutory declaration of the licensable nature of the patent. This should bring the two

systems into, at least we feel it should, into better balance. It will or should step up the tracing in patents. The patentees can deal with their licensees with a little better peace of mind. It is arguments of that nature that I intend to present in favor of our recommendation.

Now similarly there is this great uncertainty as to what are per se, violations of the antitrust laws, and whether there are, per se, misuses of patents. We know that you can't use your patent on a machine to control the unpatented product that is used in the machine. Some of those rules are pretty well established.

We have no desire to question them, we don't quarrel with them. But the ingenuity of lawyers advancing misuse defenses has no limits. It just seemed to us that we should have a rule of reason for appraising the propriety of the validity of a condition which is imposed by a patent owner upon his licensee in a sort of case-by-case approach. What might be reasonable in one patent case might be unreasonable in another patent case. This is all that we have asked for in that recommendation.

Mr. POFF. Mr. Chairman, I thank the distinguished witness. I think he has contributed a great deal to our general understanding of this extremely difficult, sometimes obscure field of the law.

Mr. NEUMAN. Thank you, sir.

Mr. KASTENMEIER. Thank you, Mr. Neuman, for a very enlightening presentation.

The Chair would like to announce that this concludes this morning's hearing.

Next week, on May 25, 1967, at 10 a.m. in this room there will be a hearing, at which time the committee will hear from Edward F. McKie, Jr., chairman-elect of the Patent Trademark and Copyright Section of the American Bar Association. There is a possibility that Mr. Frank Pugsley, of the American Patent Law Association, or another witness, may also appear. In any event, we will hear from Mr. McKie.

Mr. POFF. Mr. Chairman, simply for purpose of the record, I have a conflict at that hour. I will be attending Subcommittee No. 4, which is conducting a hearing on a bill which I introduced. I hope I will be forgiven if I am in attendance at that meeting that morning.

Mr. KASTEN MEIER. We will miss you, Mr. Poff, but we will keep that in mind. Until May 25 at 10 a.m., the committee stands adjourned.

(Whereupon, at 12 o'clock noon the committee was recessed, to be reconvened at 10 a.m. Thursday, May 25, 1967.)


THURSDAY, MAY 25, 1967

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

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

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

Mr. KASTENMEIER. The subcommittee will come to order for further hearings on H.R. 5924, the Patent Reform Act of 1967. The subcommittee is pleased to welcome as its witness this morning Mr. Edward F. McKie, Jr., chairman-Elect of the American Bar Association's Section of Patent, Trademark, and Copyright Law.

Mr. McKie, we welcome you. You may proceed as you wish. Perhaps you would like to identify your colleague.


Mr. McKIE. Yes, please. Thank you, Mr. Chairman. This is Mr! William E. Schuyler, Jr., of this city who is chairman of the section's committee on Patent System Policy Planning.

Mr. Chairman, I have been employed in the patent field since 1949 when I began work as a patent searcher and trainee with the Washington office of a New York law firm, while attending evening law school at Georgetown University.

Since 1952, I have been engaged in the private practice of law, şpecializing in patents, in Washington. My firm and I have engaged in every area of patent practice, from novelty, infringement and validity investigation, to patent application preparation and prosecution, to patent litigation and to general patent advising.

At the present time about 75 percent of our billing is in patent litigation in which we represent some of the largest firms in the country, but we also represent a large number of individuals and small companies.

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