today in the face of 35 U.S.C. 122, the first statute to affimatively authorize such secrecy. Indeed, it takes a very agile patent applicant to maintain the subject matter of his patent application a total secret prior to its issuance.

35 U.S.C. 122 when enacted in 1952 was represented to Congress to be a codification of a long standing Patent Office rule. Thus, the Reviser's Note accompanying the statute at the time of its enactment states:

"This section enacts the Patent Office rule of secrecy of applications." Along the same vein, Mr. P. J. Federico's commentary on the 1952 Patent Act says of 35 U.S.C. 122 that

"Section 122 is a new section which enacts as part of the statute the rule of secrecy of patent applications which has been in the Patent Office rules in one form or another for about a hundred years...."

In fact, the purpose of Section 122 was not really to codify an agency practice though this may have been incidentally accomplished-but sub silentio to lend an aura of statutory authority to a false theory that grew up at some indeterminate time between 1870 and 1952.

In his book, "The Supreme Court and the Administrative Agencies", The Free Press, N.Y. (1968), Martin Shapiro has devoted some 84 pages to the subject of "The Supreme Court and the Patent Office". Of particular interest in the context of the present effort to modernize the patent laws are the revealing subsections (pp. 204-213) relating to the Patent Act of 1952 and the manner in which it was formulated and enacted, a copy of which is appended as Exhibit 2. This material demonstrates that the actual drafters of the 1952 Patent Act carefully concealed from the Congress the basic intent underlying many of the provisions written into the statute and in due course adopted by Congress with wholly different intent in view, without knowledge of the drafters' real purpose or the pertinent facts.

35 U.S.C. 122 was unquestionably one of the statutory provisions which Congress was induced to enact without knowledge of the underlying intent of the persons who drafted it or the facts pertinent to why it was desired. Since its enactment, 35 U.S.C. 122 has consistently been utilized as the vehicle for imparting a tinge of federal "property right" to so-called "trade secrets" constituting unpatented and unpatentable subject matter. Proponents of trade secret "property rights" argue that the secrecy provision of 35 U.S.C. 122 is intended to afford to the alleged "property" owner an absolute right of trade secret "property" in the subject matter of all abandoned patent applications, and that each patent applicant has the right after he has had his patent application examined at public expense to decide whether it shall be exploited as a trade secret or as a patent. In short, under this theory patent applicants never lose because if they can't qualify for a patent or are dissatisfied with the claims the Patent Office will allow they can abandon their applications and still have monopolies called "trade secrets". To amplify, it is presently common practice under the state law for the holders of alleged trade secrets to license such trade secrets for running royalty payments to a plurality of competitors. It is not unusual for these running royalty payments to continue in perpetuity or for other arbitrarily selected periods greatly in excess of the statutorily authorized patent term. As will readily be seen, when a so-called "trade secret" is actually shared among all the significant competitors in a field, each of them paying a running "royalty" in exchange for having received a disclosure of the "trade secret" subject matter, the so-called "owner" is in the same position with respect to the enjoyment of a reward extracted from members of the public as if he had obtained a valid patent from the Patent Office. At the same time, he enjoys many advantages that the holder of a valid patent does not in that there is no law of "misuse" of trade secrets and no way in which a trade secret can be invalidated. Moreover, because the trade secret holder chooses the limits of his "trade secret" himself and need not observe the limits of claims granted by the Patent Office. also choose the term of his trade secret himself and hence is not limited by the statutory monopoly term of the patent, and still further chooses those to whom he will "license" the secret, on any basis he wishes without fear of being guilty of patent misuse as a result thereof, he is in effect his own patent office and his

monopoly is in many respects greater than that which the government affords to a legitimate patentee."

That Congress had no such end in view when it enacted 35 U.S.C. 122 is abundantly clear from the legislative history of the 1952 Patent Act including the record of the hearings which preceded the enactment and the Senate and House Reports which accompanied it. Indeed, the entire theory that secrecy in the Patent Office has as its purpose to promote private trade secret interests of individual inventors is not only foreign to the spirit and intent of the constitutional patent clause which has a primary public purpose but one which finds no support whatever in any record of any antecedent Congressional deliberation, statute or precedent. Only cetain text writers of relatively latter day origin have purported to subscribe in any manner to this theory and even they provide no cogent support for it-as they could not, since none exists.

Retention in the Administration patent bill which first became available to the public on September 27, 1973 of a provision for maintaining patent applications in secret until a notice of allowability is given is, insofar as the organized patent bar is concerned, retention of the tenuous and at no time consciously or directly statutorily sanctioned by Congress "right of election" between a patent monopoly and a trade secret monopoly after the public has paid for an examination.

RELATION OF SECTIONS 122 AND 301 OF THE ADMINISTRATION BILL

The new Administration bill couples its retention of Section 122, essentially unchanged, with a new Section 301 which would effectively legitimatize the private trade secret monopoly and give trade secret "owners" carte blanche to victimize the public through spurious private monopolies neither constitutionally sanctioned nor permitted by federal patent law. In particular, subsection (b) of Section 301 purporting to prohibit the states from granting "the right to limit the full and free use by the public of ideas in the public domain or in general circulation" is ambiguous. Strictly construed, it would appear to permit the state to grant some form of "petty patent" or "trade secret" right enforceable against others on any subject matter which could be shown to be novel by virtue of the slightest variation from known subject matter or which would be obvious in relation to "ideas in the public domain or in general circulation". The interplay between Section 122 and Section 301 is such, if enacted, that the two sections will be used to revitalize and reinforce one another and will be argued as constituting a congressional approval of the practice of filing a patent application, obtaining an examination at the expense at least in part of the general public, and then, in the light of the narrow scope of coverage available from the Patent Office, deciding that the subject matter shall be held "secret" for exploitation as a monopoly under state law in accordance with Section 301 rather than permitted to issue as a patent and this notwithstanding the fact that these matters have never been fully and candidly aired before Congress. The problem with Sections 122 and 301 of the Administration bill is particularly highlighted by the present pendency before the Supreme Court of a petition for writ of certiorari in No. 73-187, Kewanee Oil Co. v. Bicron Corp., et al. The case arises from the Court of Appeals for the Sixth Circuit which held effectively that subject matter which has been exploited by public use and sale for more than one year and hence can no longer qualify for a valid patent may not be protected as a trade secret but must be considered under 35 U.S.C. 102(b) to be within the public domain. The Administration bill as now presented would sub silentio overrule or at least attempt to overrule the Kewanee case regardless of how the Supreme Court may deal with it. The objective is to preempt or overrule any Supreme Court decision on the question of whether, in acordance with the previous decision in Lear v. Adkins, 395 U.S. 653 (1969), the constitutional patent clause and all the patent laws as heretofore enacted by Congress circumscribe

2 Proponents of this argue that because an independent discoverer of the trade secret can use it freely-i.e., one cannot be sued for infringement of a "trade secret"-the trade secret protection is less. It should be recognized that this single disadvantage is outweighed for many would-be monopolists by the significant advantages detailed in text.

the law of private contract relating to trade secrets in essentially the same way that the patent clause and the patent laws since 1790 were found to circumscribe the state law of unfair competition in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964). In short, what the Administration bill will accomplish if enacted is, without knowledge by the Congress of all the facts or the real intent, to foreclose decisions which the Supreme Court may make in the future on constitutional grounds. If Congress is now to make judgments upon the leeway to be afforded the states for the protection of trade secrets by private monopolies, then, at the very least, Congress must engage in detailed consideration in the light of full knowledge of what it is accomplishing and must particularly consider what limits the constitutional standard of invention necessarily imposes on such private monopolies. It is submitted, moreover, that Congress should not place a federal legislative imprimatur upon the state law of trade secrets as it now exists, since that law as now extended far beyond the narrow bounds of personal fiduciary relationship upon which it was originally premised and as to which it is still valid, is necessarily in direct conflict with the constitutional patent clause and every patent law enacted by Congress since 1790. In short, there is no clearly demonstrated need or jurisdiction for this sweeping legislation, which has not been fully explained to Congress and has not been the subject of fully focused factual inquiry by the Subcommittee.

The foregoing discussion of Sections 122 and 301 of the Administration bill, first available to the public, including the writer, on September 27, 1973, is not intended to be exhaustive of criticism of the provisions of that bill. Per contra, in the short time that such bill has been available, there has been no opportunity to digest or consider thoroughly any of the others of the provisions it contains. Other provisions, like those especially discussed, may also contain hidden or camouflaged dangers to which the Subcommittee should be alert and hence careful consideration of every provision of the Administration bill is urged.

SPECIFIC COMMENT CONCERNING PARTICULAR SECTIONS OF S. 1321

Many sections of S. 1321 have already been the subject of extensive comment by the writer and by others who have testified. Presumably various sections will also be commented upon in writing by members of the public who did not testify. Particular attention is invited, however, to the following specific subsections which it is believed merit further consideration by the Subcommittee:

Section 119 (c).-This section should be reworded to make clear that even though the first filed foreign application has not been "withdrawn, abandoned or disposed of without having been laid open to public inspection and without leaving any rights outstanding", a subsequently filed application in the same foreign country by the same applicant may serve as the basis for a right of priority provided the first application was filed not more than one year before the United States application. Such a provision is consistent with the original Paris Convention and the Stockholm Revision; is consistent with the treatment that United States applications are afforded in foreign countries, and is consistent with the way that the present law is construed, quite properly, by the Patent Office. To exemplify; If the first filed foreign application does not contain sufficient disclosure to satisfy 35 U.S.C. 112 or otherwise fails to satisfy some requirement of United States law but a subsequently filed foreign application is adequate under United States law and a United States application based upon both is filed within a year of the filing date of the first application, the fact that only the second application complies with United States law and hence qualifies under 35 U.S.C. 119 should not prejudice the applicant from obtaining the benefit of his second application. In such a case. moreover, so long as the United States application has been filed within a year of the first filed application, the United States public is in no way hurt by the fact that the earliest priority date available to the applicant is the later date of the second application. Section 120.-The desirability of perpetuating any form of continuationin-part application is exceedingly doubtful. One of the most frequent criticisms of the United States patent system I have heard voiced by foreigners is a criticism of the continuation-in-part practice as it now exists. Moreover,

the practice is widely abused both by design and by accident. The practice frequently results in situations where an applicant's United States patent issued from his continuation-in-part application is invalid based on the 35 U.S.C. 102(b) or (d) consequences of his own foreign patent issued on a counterpart to his original United States patent application. If the practice is to be as severely curtailed as it would be if Section 120 (a) (4) of S. 1321 were enacted, it will be relatively unavailable to practitioners in any event and extremely cumbersome to deal with. It would seem that total abolition of the pratice by deletion of the section might well be the more desirable alternative since it would permit simplification of the practice and would give greater certainty to practitioners in the long run.

Section 282 (c). This subsection would greatly complicate the presently required statutory notice under 35 U.S.C. 282 required of persons opposing the validity of a patent. In point of fact, the present Section 282 notice is an outmoded throwback to practice under the equity rules as it existed before the Federal Rules of Civil Procedure with their liberal discovery provisions were promulgated for all litigation, including patent litigation. In litigation as it now exists, every litigant (including every patentee) has the right by the use of interrogatories, pretrial depositions and requests for admission to obtain whatever information he may deem necessary relative to the claims which are being made against him including the basis for allegations of invalidity, etc. Because the tendency is toward simplification and not overcomplication of litigation procedures, it would seem more equitable and more appropriate to delete the anachronistic requirement for the 282 notice altogether and to leave to patent litigants the choice of what pretrial discovery to pursue. The trial judge, who presumably will know the facts of the case, will be able better to determine the extent of specific information that it is feasible or useful to require in any given case.

SPECIFIC COMMENT ON THE PROPOSED APLA BILL

This bill, filed as a part of the testimony given September 11 on behalf of the American Patent Law Association, is not really a "reform" or "modernization" bill at all. It fundamentally constitutes a mere rehash of S. 643 with some retrogressive embellishments, e.g., in Sections 102 and 103 designed to make patents easier to obtain and easier to enforce. It has already, in essence, been fully considered and rejected by the Subcommittee and hence does not merit further detailed consideration at this time.

Published by THE BUREAU OF NATIONAL AFFAIRS, INC., WASHINGTON, D.C. 20037

THE SUPREME COURT AND ADMINISTRATIVE AGENCIES

By Martin Shapiro

THE PATENT ACT OF 1952

From an excursion into the world of litigational bargaining we return to our main story, this time at the year 1952. But the story itself now leads us from Supreme Court and administrative agency to pressure groups and Congress. And again this is not an unusual route peculiar to patent law. Since both court and agency function as supplementary lawmakers under the statute maker, it is hardly surprising that the statute maker sporadically intervenes in the relationships between his two subordinates. It is important to note, however, that such intervention may create a major change in policy, a minor change or, in spite of the passage of a whole new statute, no change at all. In other words, it should not be automatically assumed that the statute maker always makes big policy decisions and the courts and agencies little ones. Each is capable of various levels of intervention in the legal process taken as a whole. The Patent Act of 1952 illustrates an intervention by the statute maker that approaches the zero level.

It is always best to begin the examination of a new statute at the beginning, not with its birth but its conception. By the early 1950s there was a widespread feeling among patent lawyers that the Supreme Court had gone astray and that somehow the good old days as symbolized in the pre-1930 cases had been better and should be revisited. The Patent Office was, of course, both a source and supporter of these sentiments. In 1952 one of those legislative accidents occurred that frequently serve as the catalyst that turns widespread sentiment into concrete political action. Congress was in the process of recodifying the laws of the United States. The U.S. Code is an arrangement in logical sequence of all the laws passed by Congress. But as minor amendments and major changes build up, and are tacked on here and there to the old code, things get more and more confused. Eventually the Congress does a periodic general cleaning and straightening up and then re-enacts its newly ordered arrangement of the laws as a new edition of the U.S. Code. It just so happened that in 1952 the subcommittee of the House Judiciary Committee in charge of going through the entire code and preparing a new edition was the subcommittee which in the normal course of its business, when it wasn't redoing codes, was in charge of proposed patent legislation. So long as the subcommittee had to work over the patent sections of the Code anyway for a new edition-and they badly needed straightening-it might as well take the occasion to improve the law, since that was part of its normal responsibilities-two birds with one stone, so to speak.

At least those forces anxious to undercut the Supreme Court pressed this argument on the members of the subcommittee. They responded favorably and set the subcommittee's professional staff to work on drafting new legislation. The reader will recall that the rather cumbersome term "statute maker" rather than Congress was originally adopted to emphasize that legislation was often a joint product of the executive and legislative branches, not of Congress alone. He should not be surprised to find then that Mr. J. P. Federico, a leading member of the Patent Office bureaucracy, soon appeared as a counsel to the subcommittee-that is, a member of its staff-and was given the central responsibility for drafting the proposed law. There is nothing improper about this. Experts fom the agencies are frequently seconded to congressional committees for such work. But in a very real sense the Patent Office wrote the congressional statute of 1952 as part of its continued battle with the Supreme Court.

It had help. The American patent bar is a relatively well-organized group comprehending most of the lawyers who specialize in patent matters, formed into regional associations with a national coordinating hierarchy. As soon as patent law revision was in the wind, this group created a task force of its most prominent leaders to help shape the legislation. This task force became so active in the statute drafting that in the end Mr. Frederico did not so much draft legislation for a congressional committee as with the patent bar. Not only did he and three lawyers officially representing the