business, and inventors; and representatives of the scientific and academic world and the patent bar.

These hearings will necessarily consume a substantial number of days. I believe that my colleague from Virginia, Mr. Poff, will join me in saying that-as in the case of the copyright law revision, which the House has just enacted after more than 2 years of careful consideration by this subcommittee-we regard the patent revision not as a partisan issue, but as a challenge to produce sound legislation in the public interest.

We exhort all parties to join us in our effort and to be open minded and receptive to the views and arguments of those with whom they may at present disagree.

The witnesses today are the Honorable J. Herbert Hollomon, Acting Under Secretary of Commerce, and the Honorable Edward J. Brenner, Commissioner of Patents.

They are both very welcome before the subcommittee, and at this time, I would like to yield to my distinguished colleague, with whom I have gone through such a great deal in the past 2 years, concerning copyrights.

Mr. Poff from Virginia.

Mr. POFF. Mr. Chairman, thank you very much for this opportunity to say publicly that so far as I am concerned-and I believe I speak for the other members of the minority on the subcommittee-this will indeed be a bipartisan-more accurately, a nonpartisan inquiry.

It will be full and complete and it will be our purpose to encourage all interested persons to exhaustively examine the subject, so far as his particular theme is concerned, as nearly as possible in his first presentation. As the chairman has indicated, it will not be feasible to continue the hearings over a long period of time. It is important then that the full case be made at the first presentation.

As much as we would like to give every witness the opportunity to make a rebuttal and a surrebuttal, that simply will not be possible. So as you address your subject, bear that in mind, please, and try to deal with all facets of it and if possible, anticipate the position that will be assumed by those who may have a somewhat contrary interest. As the chairman has said, this proposed legislation is the result of the recommendation of the President's Commission on the Patent System.

The Commission study has highlighted many alleged deficiencies in areas that may need improvement in our patent system. Included in these deficiencies and these areas, are such matters as the unnecessarily lengthy time it takes an inventor to receive a patent; the costly, and sometimes unnecessary legal actions an inventor must undertake to enforce his patent rights, and the expenses an inventor must endure to secure a patent, especially when there are competing plans.

It has also been contended that new scientific and technological advances are being kept within the monopoly of patents far too long to benefit truly the public. It has been observed by others that trade is hindered by the inconsistent patent practices of our country and other industrial nations of the world. To remedy these and other weaknesses,

and outdated sections of our patent system, if indeed, there are such, H.R. 5924 would substantially alter the method by which a patent may be obtained; the procedure for examining and testing the validity of a patent claim; the timing of a patent application, publication and judicial consideration of all patent matters.

H.R. 5924 is comprehensive; it is complex; many of its proposals are basic in concept, and are necessarily controversial in character.

At the outset of these hearings, I hope I might allay the alleged fears of those who would be affected by the reforms under consideration. This subcommittee will, I assure you, proceed most carefully and deliberately. There is no disposition whatever to push or rush this proposal through the House of Representatives without fully hearing and considering all of its implications and its import.

Those who would hold any doubt need only look at the recently completed work of this subcommittee on copyright law revision. I am sure this subcommittee will give patent reform the same careful consideration.

May I also urge all of those interested who are affected by this proposal to make a particular effort to clarify their positions on the proposed patent reform, and to make every effort to become aware of the positions and convictions of those who appear to be in a conflicting posture.

I am hopeful that as we proceed, the controversies which are so obvious today, may be resolved tomorrow, and that it will happen because of the efforts of the parties themselves.

Those who were present when this subcommittee began the copyright hearings, doubted that it would ever be possible to resolve the many controversies which were then apparent, but over the course of the hearings, the parties themselves were persuaded to move together and resolve their own difficulties.

To a large extent, when the bill went to the floor, those difficulties were resolved. Some areas of controversy, of course, remained and many will remain when the patent bill goes to the floor, but it will be in the interest of the parties in interest, if they, themselves, try to solve their own problems.

Mr. KASTENMEIER. The gentleman from California?

Mr. EDWARDS. No, thank you.

Mr. KASTENMEIER. The gentleman from Delaware?

Mr. ROTH. No, thank you.

Mr. KASTENMEIER. Dr. Hollomon, I invite you to proceed, if you identify your colleagues at the table for the record.

will

Dr. HOLLOMON. Mr. Chairman, I am delighted to be here this morning. On my left is Commissioner Brenner, the Commissioner of the Patent Office; on my right is Gerald Mossinghoff, who is engaged in general matters of legislation within the Patent Office.

We have this morning, two statements; one from me, and then one from the Commissioner.

If it be consistent with the chairman's wishes, I would like to proceed with mine and questions, then have Commissioner Brenner proceed, if that is satisfactory.

Mr. KASTENMEIER. You may proceed, Dr. Hollomon.

90-355 0-68-pt. 1- -3

STATEMENT OF J. HERBERT HOLLOMON, ACTING UNDER SECRETARY OF COMMERCE, ACCOMPANIED BY EDWARD J. BRENNER, COMMISSIONER OF PATENTS, AND GERALD J. MOSSINGHOFF, DIRECTOR, OFFICE OF LEGISLATIVE PLANNING, U.S. PATENT OFFICE

Dr. HOLLOMON. Before going into my formal testimony, I would like to comment on the chairman's comments and on Mr. Poff's comments. It has been our intent to press to get this matter before the Congress for we are convinced that the matter, as important as the patent system reform, should be one in which the Congress takes active interest and in which the matter is resolved before the Congress. Having gotten to that position, it is our hope that the issues can be resolved in open hearings, and in an appropriate consideration of other people's

views.

We are deeply concerned that the patent system does in fact, need reform. We think that it needs reform for several reasons. One is the fact of getting more reliable protection for inventors and innovators in the United States, but perhaps even more important, to recognize the U.S. position with respect to world affairs and world trade, and this is beyond and above domestic issues which affect the domestic industry directly or the patent bar.

So with that introduction, I appreciate very much the opportunity to be here today to testify in support of "the Patent Reform Act of 1967," H.R. 5924. Accompanying me, as I said, is Mr. Brenner, and he will discuss in some detail the key provisions of the patent reform bill.

The patent reform bill, transmitted by the President to the Speaker of the House of Representatives on February 21, 1967, is designed to aid this country's economic growth by strengthening and modernizing the U.S. patent system to cope with today's problems and tomorrow's challenges.

The patent system has played an indispensable role in the scientific achievements and economic growth of this Nation. In a literal sense, the history of this country's economic and social progress is recorded in the more than 3 million U.S. patents issued by the Patent Office.

From the patenting of the cotton gin by Whitney in 1794 to the development and perfection of xerography by Chester F. Carlson in modern times, the patent system has spurred the creative and ingenious work of inventors and scientists; and it has stimulated American business to translate this work into products and processes that have enriched our lives. It has helped to create whole new industries, and to increase innovation and competition in existing industries. It has fostered the most revolutionary scientific and technological advances in the history of civilization, and it has thereby contributed to the social and economic gains not only of the United States but of the world at large. In short, the patent system has in the past served well its constitutional purpose: "To promote the progress of science and the useful arts."

But if the patent system is to continue to serve as an effective instrument of progress it must be strengthened to cope with the challenges foreseeable in the decades ahead. It must keep pace with the technological advances it has served to foster.

In the last two decades, the United States has gone from a nation which was not a leader in science and technology, to one in which we are the leading nation of the world, and it is that fact perhaps more than any other that requires a reconsideration of the basis of the patent system reform. There is serious concern that the patent system has not kept pace with technological advances.

The criteria and procedures for examining and issuing patents were established in 1836 and have remained fundamentally unchanged in the intervening years. Meanwhile, we have undergone a dramatic transformation, creating and utilizing an enormously complex technology, to emerge as the world's most productive industrial community.

We have progressed from a basically agrarian economy, through the industrial revolution, into the maturing years of the space age. Men have the tools today to do in moments what previously was impossible or took years to accomplish. Giant rockets free man for the first time from the confines of the earth, while miniaturization makes possible electronic prosthetic implants to save lives here on earth. Pharmaceutical advances have dramatically increased the span of man's life, while microbiological studies explore into the very nature of life itself. Never before has man been able to unlock so many secrets of nature and to apply the knowledge acquired with such meaningful results.

All of this intensifies the need for an effective and up-to-date patent system, while at the same time increasing the difficulties which must be overcome.

The world's scientific and technical information, which must be reviewed by the Patent Office prior to the grant of a patent, is being generated in such quantity that it is becoming unmanageable by conventional storage and retrieval methods. And as technology becomes more sophisticated, disclosures must become increasingly complex. All of this makes more difficult the task of the Patent Office in determining which inventions are really new and which are obvious modifications of existing technology.

What has been called the technology explosion is reflected in the number and complexity of patent applications. Despite the streamlining of methods and procedures in the Office, and despite the cooperation of the patent bar in expediting the examination of patent applications, the Patent Office still has a backlog of approximately 200,000 pending applications. The average period of pendency of a patent application from its filing until its final disposition is now about two and a half years, with a substantial number of applications pending 3 or more years. And under present law, once an inventor satisfies the legal requirements for a so-called reduction to practice of the invention, he has in effect an indefinite period of time in which to file a patent application and claim, against competing applicants, that he is the first inventor. As a matter of fact, under this procedure, he may delay the publication and issuance of the patent, to any degree which he determines is appropriate.

These delays in the Patent Office and in filing of the application cause uncertainties for businessmen who must rely on patents. More seriously, in my view, they retard the public disclosure of technological advances, which is a major constitutional objective of the patent sys

tem. And a system which permits patents to be granted without timely public disclosure of the inventions cannot be either fair, equitable, or in this general thrust of the constitutional aim of the patent system.

The sharp increase in patent applications filed in this country and worldwide in the last decade, is due not only to the accelerated pace of scientific and technological progress; it reflects also the unprecedented expansion of international trade and the requirement of companies to obtain patent protection coextensive with their international markets. This has resulted in multiple filings of patent applications on the same invention in more than one country.

Roughly half of the estimated 650,000 patent applications filed worldwide each year are duplicates or substantial duplicates of other applications filed elsewhere. It is estimated that in 1972, of the 100,000 patent applications which will be filed in this country, 30,000 will originate abroad and be duplicates of foreign-filed cases. And in turn, 30,000 of the 70,000 applications originating in this country will be filed in an average of five foreign countries, giving rise to an additional 150,000 applications worldwide.

Not only is there unnecessary duplication of effort in prosecuting and examining applications for the same invention in more than one country, companies and individuals seeking protection for their inventions must make their way through a complex maze of divergent patent laws and procedures.

These factors increase the cost of securing multinational patent protection and thus serve as an artificial barrier to international trade.

And I would like to say parenthetically, that the foreign filer in this country, from a practical viewpoint, does not have the same rights nor the same rules of the game applied to him as a domestic filer for a patent. Because acts abroad cannot be proved to establish a date of invention, a foreign applicant is normally limited to the time of his first filing in the foreign country, while the date of a domestic inventor's invention goes to the time of first invention. This has given rise to the charge that we discriminate against the foreigner, and it is my view, having just returned from a meeting of OECD countries in Europe so concerned with our technological lead, that this kind of discrimination will call for other kinds of discrimination against us.

Concern that the patent system is inadequately equipped to deal either with the ever-accelerating rate of technological development or with the expansion of world trade, has led some commentators to question the very need for a patent system in today's context.

Adopting a far more realistic approach, the President, in 1965, established a commission of leading citizens to analyze the contemporary needs of the patent system and to suggest any necessary modifications and improvements.

Prior to the establishment of the President's Commission, the Commission of Patents, with the approval of the Secretary of Commerce, had instituted a series of administrative reforms-referred to as "streamlined examination"-to simplify Office procedures and reduce unnecessary delays in obtaining a patent. These reforms have increased by more than 25 percent the disposal of patent applications and reduced by an average of 6 months the time required to process patent applications. But these administrative reforms do not represent a long