and the other leading industrialized countries, to explore ways of improving international cooperation.

A long-range goal of this country and other nations of the world is an international patent system which would reduce unnecessary duplication in filing and examining patent applications. The objective is to provide incentives on an internatonal scale for creativity and innovation which are essential for the economic development of all people. The first-to-file and other provisions of H.R. 5924 take on added significance in the context both of our immediate plans for international cooperation and this long-range goal.

Of the 76 member countries to the Paris Union, only three, the United States, Canada, and the Philippines, base priority on a firstto-invent basis. And a royal commission in Canada, empaneled to study their patent system, strongly urged in 1960 that Canada amend its laws to award priority on a first-to-file basis. And I would say parenthetically, that Canada would find great difficulty in implementing this recommendation unless we took similar steps because of the closeness and proximity today.

With respect to one of the fundamental premises of patent protection, therefore, the United States is not in step with the rest of the world. This, perhaps now and surely in the future, would be a major obstacle to full participation by the United States in any really meaningful multinational patent system.

I have emphasized, and perhaps overemphasized, the first-to-file provision of this bill. I have done this, first, because this provision is one which contributes materially to all four of the objectives of the legislation; and secondly, because it affords an insight into the approach of the Commission; it demonstrates clearly the public policy factors considered by the Commission in shaping this and the other equally significant recommendations.

As noted by the President in his letter of transmittal, H.R. 5924 contains a series of far-reaching and fundamental proposals which will, in the President's words, "serve the interest of all Americans, as the Constitution mandates, by promoting the progress of science and the useful arts in the decades ahead." We therefore strongly urge enactment of this important legislation.

We welcome this opportunity, Mr. Chairman and members of the committee, to express our views on the patent reform bill and we would be pleased to provide any additional assistance or advice desired by the committee in its study of this matter.

Mr. POFF. Mr. Chairman.

Mr. KASTEN MEIER. Mr. Poff.

Mr. POFF. May I suggest that inasmuch as the next witness is likely to cover much of the same ground that many of the questions which we would direct to you would be better put perhaps, to the next witness. On the other hand, testimony by the other witness may prompt us to inquire of you about a matter within your particular purview and therefore, Mr. Chairman, I believe it might expedite the proceedings if we just proceed to the next witness and reserve questions until both testimonies are concluded.

Dr. HOLLOMAN. Mr. Chairman, I would be glad to wait, if that is your pleasure.

Mr. KASTEN MEIER. All right. You may proceed, Mr. Brenner.

STATEMENT OF EDWARD J. BRENNER, COMMISSIONER OF PATENTS

Mr. BRENNER. Thank you, Mr. Chairman.

As Dr. Holloman has stated, the patent reform bill will bring about the first major revision of the U.S. patent system in more than 130 years. The bill contains a number of significant provisions. These complement and reinforce each other in many respects, so that taken together, they achieve three major objectives of the bill. These provisions will also pave the way for closer international cooperation which ultimately will reduce the workload of the patent offices of the world, and reduce materially, the costs of securing international patent protection.

In the time available this morning, it will be difficult to review in detail all of the features of H.R. 5924. Instead, I propose to explain the key provisions of the bill, how they would change existing law, and how they would be implemented. This will give the subcommittee an overview of the bill and the President's Commission's plan, and afford a basis for more detailed questions and discussion.

It may be useful at the outset to contrast the type protection afforded by the patent laws with that provided by the copyright laws. Copyright protection is generally characterized as subjective in nature. An author may obtain a valid copyright on his book if the work is an “original work of authorship." As stated in the report accompanying the copyright law revision, H.R. 2512, "This standard does not include requirements of novelty, ingenuity, or esthetic merit." Also, two authors may obtain valid copyrights on essentially the same work so long as one did not copy from the other. By the same token, the exclusive rights conferred by the "bundle of rights" that is a copyright are subjective in that they do not apply to original works of other authors which were not derived or copied from the copyrighted work. In contrast to this, to be patentable under the patent laws an invention must meet an objective standard. It must be new, useful, and unobvious over existing technology-what the patent specialists refer to as "prior art"-whether or not the inventor was actually aware of this prior art. Also, only one patent may be issued on the same invention. Consistent with this, a patent confers the right to exclude others from making, using or selling the patented invention, and this right extends to all manufacture, use or sale of the patented invention, within the United States, whether or not the infringer actually knew of the patent or the patented device.

Although founded upon the same constitutional provision, article 1, section 8, clause 8, copyrights and patents are based upon essentially different theories of protection. Each, of course, is intended to stimulate creative work and foster public disclosure of this work.

The patent reform bill is intended to enhance the effectiveness of the patent system in achieving this objective.

As President Johnson noted in transmitting H.R. 5924 to the Congress, its purposes are:

1. To raise the quality and reliability of U.S. patents.

2. To reduce the time and expense of obtaining and protecting a patent.

3. To speed public disclosure of scientific and technological information.

The President also noted that "these changes will accomplish another important objective-they will bring the U.S. patent system more closely in harmony with those of other nations."

Although each provision of the bill is part of an integrated plan which in sum achieves the objectives of the bill, it would perhaps be helpful to discuss the major provisions of the bill in the context of the individual objectives of the bill.

A number of the recommendations of the President's Commission on the Patent System, which are included in H.R. 5924, are designed to improve the quality and reliability of U.S. patents. Greater reliability, which results from high quality in the issuance of patents together with public recognition of this high quality, will result in greater respect for patents on the part of both potential infringers and the courts. This, in turn, hopefully will reduce the extent to which litigation is necessary to enforce patent rights. Such patents would become more akin to hard currency rather than mere licenses to sue.

To reduce the likelihood of issuing patents which will later be declared invalid in the courts, under sections 136 and 151 of the bill, third parties would be permitted-prior to the issuance of a patent— to submit evidence to the Patent Office that the patent should not be granted. Under present law, patent applications are maintained in secrecy until a patent is issued. Section 151 would require publication of an application after the case is found to be allowable but before the grant of a patent. Section 136 would then give third parties, during a period of from 3 to 6 months, the right to argue that a patent should not be issued either because of "prior art" or because the inventor named in the application derived the invention from someone else. This will supplement the information now available to the examiner in deciding whether to issue a patent.

Another key provision of the bill in upgrading the quality of U.S. patents is section 137 which would provide that whenever the patentability of an invention is in issue before the Patent Office, "the applicant shall have the burden of persuading the Office that the claim is allowable." This would overrule the so-called rule of doubt now followed by the Court of Customs and Patent Appeals one of the two appellate courts which review Patent Office decisions-under which doubts as to the patentability of an invention are resolved in favor of an applicant. The President's Commission felt that resolving doubts in favor of applicants for patents would inevitably down grade the worth of patents.

Section 148 of the bill would provide that after a patent examiner and a three-member panel of the Patent Office's Board of Appeals have refused an applicant's claim, this decision "shall be given a presumption of correctness, and such decision shall be upheld unless it is without substantial basis or not in accordance with law."

Under present law there are two routes of appeal from Patent Office decisions: An applicant may either file a civil action in the District Court for the District of Columbia under 35 U.S.C. 145 or he may seek direct appellate review, on the record, in the Court of Customs and Patent Appeals, referred to as the C.C.P.A.

Under this dual line of review, therefore, the Patent Office may, and often does, find itself faced with conflicting interpretations of the law. And of course, as a practical matter, an applicant will choose that line of review most favorable to his position.

To eliminate possible conflicts in interpretation, the Commission recommended, and H.R. 5924 would provide, in section 147, that, in patent cases, decisions of the C.C.P.A. as well as those of the district court be subject to review by the Court of Appeals for the District of Columbia.

In section 12 of the bill the Commissioner of Patents is directed to "conduct a program of research and development to improve and expedite the handling, classification, storage, and retrieval of patents and other scientific and technical information." As stated by President Johnson:

As the world's library of scientific and engineering information increases and as inventions become more complex, conventional information retrieval systems are becoming roadblocks to rapid and effective patent searches. These roadblocks must be eliminated through expanded research and development and increased international cooperation.

Under section 15 of the bill, a Statutory Advisory Council would be established to provide a continuing appraisal of how the patent system is serving the public interest. This Council would report to the Secretary of Commerce on, among other things, the quality of U.S. patents. This would dovetail with the quality control program of the Patent Office already established along the lines suggested by the Commission.

Feeling strongly that all inventions should be required to meet a high standard of novelty, utility, and unobviousness, the President's Commission recommended that patent protection not be granted for plants, ornamental designs, or computer programs. The Commission concluded that this subject matter cannot be readily examined for adherence to these criteria.

Plants and designs are currently patentable under special provision of title 35. The Patent Office has taken the view that computer programs are not patentable under present law, and no patent has been issued on a computer program per se. Section 106 of the bill would codify this interpretation by providing that computer programs are not patentable. Studies are now being made, as suggested by the Commission, on possible alternate means for protecting designs and plants. Meanwhile, sections 161 to 164 and 171 to 173 would continue to provide patent protection in these areas.

As Dr. Hollomon noted, the establishment of a first-to-file system of priority, principally in section 102 of the bill, would reduce the time and expense of obtaining a patent by obviating the costly and time-consuming "interference procedure" now being used when two persons claim to be the first inventor of the same invention. Millions of dollars in legal and technical resources would be saved the public for other uses. It would also reduce to some extent the witnessed recordkeeping which companies and individuals must now practice to establish their dates of inventorship either to sustain their patents or to invalidate those of other concerns.

Also, the establishment of a first-to-file system in the United States will make easier our participation in current plans for international cooperation as well as the eventual adoption of a multinational patent system. This will materially reduce the time and expense of obtaining international patent protection.

Dr. Hollomon also mentioned the "preliminary applications" which would be authorized under sections 111 and 120 of the bill. These could be informal technical disclosures of an invention filed with a nominal fee, for example $10, to secure an early legal filing date. Under current practice, only formally prepared patent applications may be filed. An applicant typically must spend several hundred dollars in attorney's fees to have this prepared, and must pay a filing fee which averages approximately $85.

In connection with the adoption of a first-to-file system of priority, the Patent Office is now considering the feasibility of amending its rules to provide that the filing date of patent applications and papers would be the date they were deposited with a U.S. post office as registered mail; provided, of course, they meet all legal requirements.

Operationally, the Patent Office would receive "preliminary applications," record their date of filing and store them. Applicants wishing to perfect their patent applications would then have 1 year in which to file a "complete application" complying with present formal requirements. If after a year, the person filing a preliminary application did not file a complete application and claim the prior date of the preliminary, the preliminary application would be destroyed.

The 1-year period between the preliminary and complete application could be used for further research, and any resulting improvements could be included in the complete application when filed. More than one preliminary application could be filed by an applicant, each one adding new disclosure with its own filing date as the invention is developed or modified; and all of these could be combined into a single complete application filed within 1 year of the earliest preliminary application relied upon.

Under the present 35 U.S.C. 102(b), an applicant has an absolute 1-year grace period following publication, use, or sale of an invention in which to file a patent application. It does not matter under existing law whether the publication, use, or sale is by the inventor or by third parties. The new section 102 of the bill would eliminate this grace period in favor of the preliminary application approach.

During the period which follows the filing of a preliminary application, an inventor may publicly discuss, seek support for, or markettest an invention, prior to expending the time and funds needed to prepare and file a formal application. In effect, then, the preliminary application provides a substitute for the 1-year grace period, following an inventor's publication, use, or sale of this ir vention, during which he may file an application. An important difference, and a positive benefit to U.S. inventors, is that the date of the preliminary application will be recorded by the Patent Office; an inventor need not prove his date of invention by oral testimony or unofficial documents. Even more important, with the preliminary application conferring a filing date, an inventor's subsequent public disclosure will not destroy the availability of foreign patent rights, as now happens when an inventor publishes his invention during the "grace period" prior to the filing of an application.

To protect an inventor from losing his patent rights upon publication of his invention by someone having an obligation not to disclose it, section 105 of the bill would provide that such an "unauthorized” dis