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-4. If the Patent Office were to be established as an independent bureau, its cost of operation would not be increased-perhaps decreased.

5. If established as an independent agency, the Patent Office would not have representation at meetings of the President's Cabinet, but no important, longlasting advantage is known to have been realized in past years because of such representation. Its presentations to the Committees of Congress might well be more satisfactorily accomplished.

Senator Hart. Mr. Browne, thank you very much for an interesting and helpful testimony. Mr. BROWNE. Thank you very

much. Senator Hart. We adjourn to resume in this hearing room on Friday of this week at 10 a.m.

( Whereupon, at 3:25 p.m., the subcommittee was recessed to reconvene at 10 a.m., Friday, September 14, 1973.]

S. 1321—FOR THE GENERAL REFORM OF THE PATENT

LAWS, TITLE 35 OF THE UNITED STATES CODE, AND FOR OTHER PURPOSES

FRIDAY, SEPTEMBER 14, 1973

U.S. SENATE, SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS

OF THE COMMITTEE ON THE JUDICIARY,

Washington, D.C. The committee met, pursuant to recess, at 9:10 a.m., in room 1114, Dirksen Senate Office Building, Senator Philip A. Hart presiding.

Present: Senator Hart (presiding).

Also present: Thomas C. Brennan, chief counsel; and Dennis Unkovic, assistant counsel, Subcommittee on Patents, Trademarks and Copyrights; Bernard Nash, assistant counsel, Anti-Trust Subcommittee.

Senator HART. The committee will be in order.

Mr. BRENNAN. Mr. Chairman, the first witnesses this morning appear on behalf of the American Chemical Society.

Senator Hart. President Nixon, would you identify yourself?

STATEMENT OF DR. ALAN C. NIXON, PRESIDENT, AMERICAN

CHEMICAL SOCIETY; ACCOMPANIED BY: DR. ROBERT W. CAIRNS, EXECUTIVE DIRECTOR, DR. JOHN T. MAYNARD, CHAIRMAN OF THE SOCIETY'S COMMITTEE ON PATENT MATTERS AND RELATED LEGISLATION, AND DR. STEPHEN T. QUIGLEY, DIRECTOR OF THE DEPARTMENT OF CHEMISTRY AND PUBLIC AFFAIRS

Dr. Nixon. My name is Alan C. Nixon. I am president of the American Chemical Society for 1973, and with the authorization of its board of directors, I appear before you today to present the Society's statement. Accompanying me today are Dr. Robert W. Cairns, executive director; Dr. John T. Maynard, chairman of the Society's Committee on Patent Matters and Related Legislation; and Dr. Stephen T. Quigley, director of the Department of Chemistry and Public Affairs.

We appreciate being given this opportunity to comment on certain features of The Patent Reform Act of 1973, S. 1321. The issues addressed by this legislation are both fundamental to the formulation of national science policy and of vital significance with respect to the ability of our nation to resolve many of the problems which confront it. These issues have been under discussion for some time now by the committee on patent matters and related legislation of the board of directors and Council of the American Chemical Society, and a consensus on them has been under development. The viewpoint which we attempt to express is that of the chemical scientific and technological community, as represented by the American Chemical Society.

The American Chemical Society was founded in 1876 and chartered by an act of Congress in 1937 as a nonprofit, scientific and educational organization. Our current membership numbers approximately 109,000 individual chemists and chemical engineers. This membership reflects a broad spectrum of engagement in academic, governmental, and industrial professional pursuits. About 70 percent of our members are employed by industry, about 20 percent employed by academic institutions, and 10 percent by Government and nonprofit institutions. Under its national charter the society is charged with the responsibility to work for the advancement, in the broadest and most liberal manner, of chemistry, "thereby fostering the public welfare and education, aiding the development of our country's industries, and adding to the material prosperity and happiness of our people.” Also, the charter imposes an obligation on the society to provide assistance to the Government in matters of national concern related to its area of competence. Its Federal incorporation replaced a New York State charter which had been effective since November 9, 1877. We are now almost 100 years old. As a matter of fact, we will celebrate our centennial as the country celebrates the bicentennial.

One of the principal objects of the society, as set forth in its charter, is the dissemination of chemical knowledge through its publications program. That program now includes 20 journals, largely scholarly journals that contain reports of original research in the many specialized aspects of the practice of chemistry, as well as a weekly newsmagazine designed to keep chemists and chemical engineers abreast of the latest developments affecting their science and related industries. In addition, the society is the publisher of Chemical Abstracts, one of the world's most comprehensive abstracting and indexing services.

As is indicated by the objectives of the American Chemical Society, we believe that the effective dissemination of scientific and technical information is critical to the development, not only of the society and economy of the United States but also of modern society worldwide. In addition to the journal literature, patents are an important instrument for the dissemination of scientific and technical information. Unlike the chemical field with its many extensive journals program, there are many technical fields in which the published patent is the only source, or almost the only source, of technical information. And even in the field of chemistry, technical information in certain areas of major commercial importance is available only in the patent art for the first several years after the initial discoveries are made. As our technology continues to become more complex, we believe, that a strong patent system is a vital source of technical information and a major stimulus to creativity and invention. The incentives to enter the patent system need to be sustained

and strengthened if the technological preeminence of the United States is to be maintained.

We are here today to discuss the position of the American Chemical Society on certain major changes in the patent laws of the United States that are embodied in S. 1321. Senator McClellan has asked for comment on five aspects of S. 1321; (a) Provision of adversary hearings in the examination process; (b) creation of the Office of Public Counsel; (c) a system of deferred examination of patent applications; (d) a maintenance fee system; and (e) the establishment of the Patent Office as an independent agency.

We agree that these are important aspects of S. 1321, and we plan to restrict our specific discussion today to these matters.

We recognize, however, that there are many other controversial aspects of S. 1321, some of which we would favor and some of which we would oppose. For reasons which will become clear from our comments, we hope that the implementation of the major revisions of our patent statutes under consideration today will not be delayed indefinitely by indecision over the other points of S. 1321. Six years have elapsed since the report of the President's Commission on the Patent System, and we believe it is urgent that these matters be resolved if confidence in our patent system is to be maintained. The American Chemical Society stands ready to advise the Congress on any aspects of S. 1321 beyond those being considered at these hearings, or on other legislative initiatives related to the patent system that would affect the practice of chemistry.

The American Chemical Society shares the concern that has been expressed by many participants in our patent system over the high proportion of patents that are held invalid when litigated in the courts. A frequently mentioned proportion of litigated patents held invalid is 70 to 80 percent. It is obvious that many patents of doubtful merit are being granted by the U.S. Patent Office. We take note, however, of the finding by Professor Irving Kayton of the George Washington University National Law Center that, when the courts consider no prior art other than that known to the Patent Office during examination of the patent application, 75 percent of litigated patents are upheld. While different conclusions may be drawn from this striking fact, we prefer to take it at face value. If the Patent Office had the manpower and resources to bring the totality of existing art into consideration during examination, we would expect that the great majority of issued patents could withstand challenge in the courts, and confidence in the patent system would be improved immeasurably.

Recognizing these facts, the American Chemical Society believes that certain of the changes in our patent statutes proposed in S. 1321 have merit, and I would like to discuss in some detail our position on the major points suggested for consideration by Senator McClellan. Our position in some respects represents a change from that presented to this committee in February 1968 when Dr. Cairns commented on the report of the President's Commission on the Patent System and on the legislative proposals under consideration at that time. These changes in viewpoint have been influenced both by the problems with the issuance of U.S. patents already mentioned

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