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of urgency on the part of inventors and their attorneys to take prompt action to protect the invention under the patent system.

To further accelerate the public disclosure of new technology, section 123 of the bill would require the publication of pending patent applications within 18 to 24 months of their “effectve filing date," regardless of their status, unless to defer publication will permit the examiner more quickly to dispose of the application. “Effective filing date” means the legal date of the application; for example, in cases where a complete application is based upon a preliminary application, it woulld be the date the preliminary was filed.

Under present law, patent applications are maintained in secrecy by the Patent Office until the patent is granted. This frequently occurs 3 or more years after the application is filed.

Under the bill, therefore, inventors will be encouraged to file promptly and the Patent Office would be required to publish applications after a given period of time. This will promote advances based upon the disclosed work and prevent duplication of effort. Equally important, it will apprise businessmen at an early date of the invention and of the inventor's rights.

To protect the rights of inventors whose applications have been published, section 273 of the bill would permit the owner of an invention, under certain circumstances, to collect damages for the unauthorized practice of the invention by third parties after publication of an application but prior to the grant of a patent.

A number of the provisions of H.R. 5924 would bring U.S. patent practice more closely into harmony with those of the major industrialized nations of the world.

One provision which has not yet been discussed and which would contribute directly to this objective appears in section 102(a). This would establish what is sometimes referred to as “universal prior art,” under which public knowledge, use, or sale of an invention any. where in the world, prior to the filing date of a patent application would bar the grant of a patent. Under present law, patenting or publication of an invention anywhere in the world can bar the grant of a patent, but prior knowledge, public use, or sale is relevant "prior art” only if it occurs "in this country.”

The President's Commission concluded that to adopt the universal definition of prior art would eliminate the present anomaly of excluding from prior art public knowledge, use, or sale in a border town of Canada or Mexico, and including the same kind of disclosure in Alaska or Hawaii.

The change would also be an important step toward acceptance of a common definition of universal prior art. While not all of the industrialized countries operate on a universal prior-art basis, the trend is definitely toward adopting this standard. The Council of Europe Treaty on the Unification of Certain Points of Substantive Patent Law (which has been signed by the European countries, but is not yet ratified or in force) provides that prior use or sale anywhere in the world be considered as prior art. Similarly, the “Model Law for Developing Countries on Inventions," written by the Secretariat of the Paris Convention, includes this same universal standard. Adoption of this standard by the United States would, therefore, add impetus to these efforts to agree upon a universal definition of prior art.

90–355 0—68—pt. 1-4

Dr. Hollomon has discussed briefly the need for international cooperation. I would like to amplify his statement and express my conviction that such cooperation is essential for the patent systems of the world to provide effective protection of intellectual property.

As a start toward closer international cooperation, we have launched a series of experimental bilateral exchanges of search results to evaluate the usefulness of the searching work product of examiners in one country in facilitating the examination of a corresponding application in another country.

An experimental exchange of search results with the Patent Office of the Federal Republic of Germany involving 2,000 pairs of crossfiled cases recently has been completed. Although complete and final evaluations have not yet been published, the results indicate that in a sizable number of cases, the search results were of material assistance to both offices. The trial program demonstrated, I believe, that a continuous exchange would result in considerable improvement in quality in both countries and would also have a potential for time savings to the examiner. A similar experiment in process with the Swiss Patent Office appears to be producing excellent results. Other exchange proposals are in various stages of development with other countries.

These exchange programs provide us with a sound data base upon which to move ahead intelligently. The payoff from an extensive and continuing exchange agreement could be substantial, both to the patent offices which would particiapte in the plan and to patent applicants in participating countries. Under such an exchange program in full operation, a large portion of the search or examining work in anywhere from 15 to 80 percent of the applications, depending on the country, could be eliminated if all of the examining countries participated.

In order to initiate a broad-based international approach to solution to the world's patent problems, the United States proposed at the executive committee meeting of the Paris Union on October 27, 1966, a resolution that the Director of BIRPI–United International Bureaux for the Protection of Intellectual Property, the Secretariat of the Paris Union-undertake a study of ways to reduce the duplication of effort both for applicants and national patent offices. This resolution was unanimously adopted. Under it, BIRPI has been developing a plan within the framework of the Paris Union which would reduce unnecessary duplication in securing international patent protection.

To provide added flexibility to the Patent Office in shaping its program, the President's Commission proposed that patent fees, now established by statute, be determined by regulations issued by the Commissioner of Patents. Because Patent Office costs may rise, and since there is presently no provision for a corresponding increase in its service charges, the Commission concluded that any long term fixed relationship between fees received and Office expenditures could not be maintained without continuing and prompt legislative adjustments. In preference to this, the Commission recommended that fees be set by regulation rather than by statute with Congress specifying a desired rate of recovery and reviewing the fee structure during the yearly budget process.

This recommendation is implemented in section 41 of the bill. Section 271 (b) implements to an extent another recommendation of the Commission concerning the importation into the United States of a product made abroad by a process patented in the United States. Such importation is not presently an act of infringement. A process patent owner may now seek to have the offending product excluded from this country under the Tariff Act of 1930, on the ground that importation will tend to cause substantial injury to an efficiently and economically operated domestic industry. The Commission concluded, however, because of these requirements, that the patent owner has little prospect for success.

The problem is particularly revelant in cases where patent protection for the process is not available in the country of origin. To alleviate this problem, section 271 (b) would provide that:

Whoerer, without authority of the patentee, imports into the United States, for purposes of trade or use in trade or industry, a product made in another country by a process patented in the United States shall be liable as an infringer provided patent protection for the process is not available in such country.

To endorse an interpretation now given the present statute by the Patent Office with respect to double patenting, that is, the acquiring by a person of more than one patent on a single invention, section 253(c) would provide:

The fact that two patents which have been or may be issued expire at the same time by means of a terminal disclaimer or dedication under this section or otherwise, shall have no effect in the determination of the patentability or validity of a claim in either.

Under sections 3 and 7 of title 35, as they would be rewritten, the Assistant Commissioners of Patents and the examiners in chief who constitute the Board of Appeals, now appointed by the President by and with the advice and consent of the Senate, would be appointed by the Secretary of Commerce. This change was prompted by the conclusion that the President's involvement in such appointments is an unwarranted burden on him.

The Assistant Commissioners, while providing policy guidance to the Patent Office, are in turn under the general direction of the Com

ioner and secretarial officers of the Department of Commerce. And at least as early as 1875, the appointments of examiners in chief have been made by promotion of experienced examiners on the basis of merit. Also, incumbent examiners in chief, while Presidential appointees, have uniformly not left office on changes administration.

Under section 7, also, the number of members on the Board of Appeals is increased from 15 to 24 and the functions now performed by the Board of Patent Interferences which would be abolished under the bill-would be assimilated by the expanded Board of Appeals. These functions involve resolving "interference proceedings” for cases filed before the establishment of the first-to-file system of priority. They also include determinations of ownership of inventions under section 152 of the Atomic Energy Act of 1954, 42 U.S.C. 2182, and section 305 of the National Aeronautics and Space Act, 42 U.S.C. 2457.

Other, more technical, matters are detailed in the sectional analysis

of party

of the bill which was forwarded by the President with the bill and which appears in House Document No. 59.

A table showing the relationship between the Commission's recommendations and H.R. 5924 is attached hereto as appendix A. Those recommendations identified by an asterisk do not require statutory implementation at this time.

There are a few typographical errors in the bill, and these have been called to the attention of the counsel for the subcommittee. Also, in putting the bill together, the second paragraph of present section 114 relating to the furnishing of specimens or ingredients to the Patent Office for purpose of inspection or experiment—was inadvertently omitted. We suggest that this paragraph be included in H.R. 5924 when it is reported.

H.R. 7454, introduced by Representative Giaimo on March 20 as a substitute for H.R. 5924, in essence, adopts five of the Commission's recommendations.

These include the recommendations on computer programs, filing of patent applications by assignees and the naming of inventors, the 20year patent term, the importation of a product made abroad by a patented process, and an expanded research and development program by the Patent Office.

Adoption of these recommendations, in our view, would improve the patent system. H.R. 7454, however, falls far short of the Commission's plan and of the improvements which would be achieved by enactment of H.R. 5924. Thus, H.R. 7454 is not an adequate substitute for the patent reform bill.

Appendix B of my statement is a table showing those recommendations of the Commission which are included in H.R. 7454.

I realize of course, that it is impossible to cover in any detailed way in the time available this morning a revision as comprehensive as the patent reform bill.

I would be pleased to answer any questions you may have, and to return at any time as the issues develop before this subcommittee. It is my firm conviction that this revision is essential to insure the vitality and effectiveness of the patent system in the decades ahead. I, therefore, strongly urge enactment of H.R. 5924.

Mr. KASTENMEIER. Thank you, Mr. Brenner. You are from Wisconsin are you not? Mr. BRENNER. Yes, sir. Mr. KASTENMEIER. You are doubly welcome. Mr. BRENNER. Thank you, sir. Mr. KASTENMEIER. Without objection, appendix A and appendix B of your presentation and appendix A of Secretary Hollomon's presentation will be made a part of the record.

(The appendices are as follows:)

APPENDIX A TO COMMISBIONER BRENNER'S STATEMENT

THE Patent REFORM ACT OF 1967 H.R. 5924 (90TH CONG., 1st Sess.)

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XXVII Patent Office financing---
XXVIII Propriety of final rejection*-
XXIX Classification and information retrieval..
XXX Information dissemination.
XXXI Transition
XXXII Government patent policy*.

12

12 Sec. 5 of bill

INTERNAL ACTION

XXXIII Inventor's certificates*.
XXXIV Term measurement*-
XXXV Universal patent system*

• Do not require statutory implementation at this time.

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