[Subsequently Mr. Gottschalk submitted the following letters with attachments. The attachments may be found in the committee files.] ARLINGTON, VA., September 18, 1973.

Senator PHILIP A. HART,

U.S. Senate,

Washington, D.C.

DEAR SENATOR HART: In the interest of clarification and completeness, I would like to supplement my testimony in connection with S. 1321 as follows:

FURTHER SUPPORT OF THE INDEPENDENT AGENCY CONCEPT

Attached is a copy of the relevant part of the book "The Patent Office" by Stacy V. Jones, who has covered this agency for the New York Times for over 20 years.

CONCERNING UNDUE INFLUENCE

My testimony, as well as Mr. Browne's, made the point that the Patent Office has been subject, over a long period, to undue or improper influence by the Department of Commerce. However, it was not my intention to suggest that such influence was exerted throughout such period.

On the contrary, and specifically, I would make it clear that at no time during my period of service in the Patent Office did Secretary Stans, Secretary Peterson, Assistant Secretaries for Science and Technology Tribus and Wakelin, or Assistant Secretary for Administration Jobe exert any such influence. These officials were in fact, very helpful, and did much to aid and support the Patent Office.

Further, it should be added that the directive from the acting assistant secretary referred to in my testimony, was not followed. With some difficulty, he was persuaded by General Counsel William N. Letson and myself that it should not be.

WHY I WAS SURPRISED

In my testimony, I indicated that Dr. Anker-Johnson's request for my resig nation came as a "bolt from the blue". In that connection, the following additions to my testimony may be of intertest:

At the time of that request, she had been aboard for about three weeks. During that period she had virtually no contact with Patent Office personnel. Her orientation to Patent Office affairs was necessarily limited and superficial. She paid no visit to any Patent Office facilities, including those in the Commerce Department Building which I urged her to visit. The foregoing statements, in all essentials, apply also to the Secretary. He did not visit any Patent Office facilities; nor become acquainted with Patent Office personnel; nor discuss with me at any time any programs or problems of the Patent Office.

Right after the November 1972 election, all presidential appointees were required to submit proforma resignations. I promptly submitted such a resignation, but heard nothing concerning it until the middle of April 1973. It was then returned to me with a note of congratulations by Assistant Secretary for Administration Turner indicating that I would continue as Commisssioner. Three weeks later, Dr. Anker-Johnson requested my resig

nation.

Throughout my Patent Office service, I had every indication of solid support from: The patent bar-as exemplified by letters from lawyers including the presidents of the Chicago, New York, Rochester and Philadelphia patent law associations. Industry-as exemplified by letters from companies large and small, and industry associations.

Superiors and associates-as exemplified by letters from Former Secretary Stans, Former General Counsel Letson, Former Assistant Secretary for Administration Jobe, and Assistant Attorney General Kauper. Patent Office employees--as exemplified by excerpts from employee organization publications and various communications from employees.

All indications were that I was ably and effectively representing this coun try internationally.

Letters from the heads of the German, British and Canadian patent offices reflect cordial and effective working relationships with virtually all of the industrially important and many of the developing countries. Because of their confidence in me, I was elected Chairman of ICIREPAT-an international patent body dealing with many basic and world-wide problems. At the recent Vienna Diplomatic Conference, I directed the U.S. negotiation of the Trademark Registration Treaty, which I signed on behalf of the United States. I also chaired several important sessions of the Plenary Committee at that Conference.

My relationships with other Government agencies were excellent, and in all cases represented significant improvement. This included the State Department, the Department of Justice (with which I established an ongoing program of cooperation in areas of mutual concern), and the Government Printing Office.

IMPROVEMENTS BY ADMINISTRATIVE ACTION

By way of emphasizing my testimony concerning the importance of administration, it should be noted that over the last two years virtually all aspects of Patent Office operations were substantially improved solely by administrative

means.

The nature and scope of such improvements are reflected by the enclosed: Representative press articles.

Partial list of improvements effected in the three month period August-November 1971.

Address to the American Patent Law Association on May 10, 1973.

Further, it should be added that the "audit report" mentioned in my testimony was not confined to criticism. It reported on, and praised, much that I accomplished. (Perhaps the Committee might wish to review this report as concerns not only my performance as Commissioner, but also the puzzling circumstances attending my forced resignation. The Commerce Department would no doubt make it readily available.)

THE PATENT BAR WANTS BETTER PATENTS

Congressman Owens, Judge Will and others from time to time, have charged that the patent bar is resistant to change, and also "opposed to making the Patent Office function effectively".

As I recall, it has also been suggested that, in trying to make the Patent Office more effective, I alienated or antagonized the patent bar. I do not believe this for a minute.

Patent lawyers, inventors, corporations and members of the general public have all repeatedly stressed to me the importance they attach to improving the quality and enhancing the validity of the patents issued by the Patent Office. This accords with my own observation, over many years, that the overwhelming proportion of those concerned with patent matters have been frustrated, rather than pleased, by shortcomings in the patent examining process.

Admittedly, the patent bar on the whole has been very conservative about change. Accordingly, it has fallen to others, of lesser skills and experience in patent matters, to develop proposals for change. It is therefore hardly surprising that such proposals have often been criticized and objected to by the bar. But this is a far cry from saying that the patent bar wants lower standards of patentability, easier issuance, or weaker patents. I am sure it does not.

Currently, I believe the patent bar is becoming increasingly interested in promoting improvement; this change of attitude has been reflected in the hearings on S. 1321.

"MECHANIZED" OR "PUSH-BUTTON" SEARCHING

The ability to classify, store and retrieve information by computer or similar means would contribute immeasurably to the efficiency of the patent examining process. Stacy Jones has called this a "Patent Commissioner's dream".

But despite a great deal of attention to such matters for many years, there has been little real progess; and the resultant disappointment can be readily understood.

However, the subject itself is not readily understood. In fact there has been, and is, much misunderstanding concerning it. As mentioned in my testimony, this subject has generated much criticism and conflict and has been the focus of various operating and personal difficulties in the Patent Office.

Section 6(e) of S. 1321 reflects the Committee's concern with this subject. In view of its basic importance, a brief statement of the Patent Office situation concerning it would seem to be in order.

Patent Office programs of research and development in this area over a period of years have cost much and yeilded little. When I became Acting Commissioner, my awareness of this, and of the importance of this subject, prompted a careful review of what had been done in the past, and also of the efforts then underway with respect to "Project Potomac" (referred to in my testimony, although not by that name.)

I concluded, in November 1971, that I had no alternative but to curtail Project Potomac. I did so, for these basic reasons:

First, taking at face value the most optimistic views urged by its proponents, Project Potomac would at best have provided the Patent Office, three or four years hence, with the capability to process only a minor portion of the vast volume of material required for Patent Office purposes, with the balance being left to be handled by conventional means.

Second, the substantial costs of Project Potomac had been funded by diverting funds from, and virtually completely abandoning, the highly essential "manual" classification program.

By the time I became Commissioner, this had already resulted in great deterioration. And since the "manual" classification system is the primary working tool of the patent examiner, its restoration was a pressing need of the highest priority.

My decision in this respect was approved by Assistant Secretary Wakelin and by Secretary Stans. It was also in accord with advice I received from computer experts of IBM and from Price, Waterhouse consultants then working with the Patent Office.

Nonetheless, I was determined to insure that we derived from the work done on Project Potomac everything of value developed thereunder; and also, that the Patent Office would maintain a forward-looking research and development program in this area. But this program would have to be based on a full and careful analysis of the Patent Office and its operational needs, and pursue a planned and logical approach to the satisfaction of those needs.

To maximize our prospects of success, I arranged for a team of experts from the National Bureau of Standards to assist the Patent Office in this program.

After careful and extended study, they concluded that Project Potomac was not a valid means of accomplishing the objectives to which it was directed. Their reports also provided a better basis for forward planning and progress, in my view, than had ever before been developed.

THE NEED FOR PROMPTLY FILLING KEY POSITIONS

The position of Commissioner has now been vacant for almost three months. So far as is publicly known, a nominee has yet to be selected. It is known that several persons of recognized ability and stature have declined offers of appointment.

It is manifestly important that this post be filled as soon as possible, and by a person truly and well qualified to cope with its many and varying demands. There is a serious threat to the effectiveness of Patent Office operations in either extending the present period of hiatus and uncertainty, or in the appointment of a person not adequately qualified.

Prospects of filling the post soon and well would probably be substantially improved by promptly establishing the Patent Office as an independent agency. Therefore, I would suggest that the Committee might wish to consider accomplishing this by enacting such legislation, split out of S. 1321, as soon as possible. There are also other important positions in the Patent Office now vacant, and these presumably will remain so until after a new Commissioner is appointed. Among these are the positions of Deputy Commissioner and Assistant Commissioner for Legal Affairs.

The latter position was established by a reorganization of the Patent Office which I proposed and which was approved December 15, 1972. Two days follow

ing that approval, an administration "freeze" was imposed on all hirings. For that reason-and also because of the long consideration of my proforma resignation-it was impossible for me to fill that position, as well as other positions of great importance to the operations of the Patent Office.

Significantly, the considerations which prompted my establishing that new position were very similar to those underlying various proposals of S. 1321. I was particularly concerned to provide more effective legal input to, and guidance for, the patent examining operation; also, to provide a focal point for the coordination of legal activity throughout the Office and for the development of improved examination procedures. This position has never been filled.

The opportunity to present my views is appreciated. I hope they may prove of some assistance to the Committee in its consideration of the issues to which they are directed.

Respectfully,

ROBERT GOTTSCHALK.

ARLINGTON, VA., September 21, 1973.

Senator JOHN L. MCCLELLAN,
U.S. Senate,

Washington, D.C.

DEAR SENATOR MCCLELLAN: I am writing in response to your letter of September 19, 1973 in which you directed attention to the statement in my testimony on September 14 that "regularly substantial sums of money appropriated for the Patent Office are siphoned off for other uses within the Department of Commerce", in which you requested that I "furnish the Subcommittee for the record a more detailed statement concerning line item funds appropriated to the Patent Office which were otherwise utilized by the Department of Commerce," and in which you also stated that you were "requesting the Secretary of Commerce to supply the Subcommittee with a report on this matter".

As I am sure you fully appreciate, my above-mentioned statement was made in the context of consideration of the questions whether the Patent Office should be removed from the Department of Commerce and established as an independent agency, and whether the Patent Office as a part of the Department of Commerce is subject to improper or undue influence; and also, that my statement was made following, and in response to, the testimony by the General Counsel of the Department of Commerce that ". . .we are aware of no evidence in the history of the Patent Office which would suggest that any improper influence was exerted upon the Patent Office by officials in the Departments to which the Patent Office has been attached”.

Needless to say, none of my testimony, in any part or degree, was given lightly, but rather with a full appreciation of the seriousness of the issues under consideration, and of the importance of developing all facts relevant to and necessary for their sound and appropriate resolution, including those concerning the actual disposition and use of funds appropriated to the Patent Office. Further, the facts in that regard were, I felt, essential to an accurate appraisal of the recent development in budget request practices of the Department of Commerce which I mentioned in my testimony.

Clearly, the Secretary of Commerce is in far better position than am I to furnish the detailed statement of matters in this connection which you have requested. The records and other resources of the Department of Commerce are fully available to him, whereas I do not have access to either. I have not been privy to any records or activities of the Department of Commerce since June 29; and I have no records or other sources of information to which I can refer for assistance in responding to your request.

However, I believe that I am in position to at least identify lines of inquiry which, if pursued, should lead to the development of the detailed information which I understand you are seeking. Even so, I am somewhat handicapped by several considerations, which I would breifly note as follows: My terms as Commissioner was limited to 18 months, and my term as Acting Commissioner was limited to 4 months. Throughout this entire period of less than two years, I was deeply immersed in the many and varied operating and professional problems of the Patent Office. Necessarily, for the specifics involved in the handling of financial and other administrative details of Patent Office operations,

I relied to a considerable extent on my able and experienced Assistant Commissioner for Administration who joined the Patent Office from another agency in January of 1972. Nor can I claim to have mastered the special terminology employed in governmental circles to such an extent as to enable me to use, with certainty and precision, the terms which might be employed by others to describe particular transactions and events relating to financial transactions of the Patent Office and the Department of Commerce.

Having said that, let me be as direct and specific as I can.

I twice encountered the practice which I can best describe in general terms as follows. Toward the end of fiscal year 1972, and again toward the end of fiscal year 1973, the Patent Office was necessarily engaged in close and careful monitoring of the payments it made and obligations it incurred, in order to achieve the dual objectives of fully utilizing all resources made available to it, while at the same time insuring against exceeding its funds or authorizations. Toward the end of each of these two fiscal years, I recall being informed that, on orders originating with the Department of Commerce, portions of our thenremaining funds were literally transferred to, or appropriated by, the Department of Commerce for its use for non-Patent Office purposes. While I cannot state the exact sums involved, it is my recollection that in each case they were substantial. Beyond the question of the amounts themselves I was, and remain, considerably disturbed by the manner in which these transfers were effected, and by the questions of principle involved.

The same general kind of experience was also encountered in other instances which did not involve the transfer of Patent Office funds as such, but rather the utilization, at the direction of the Department of Commerce, of Patent Office personnel and facilities in pursuit of non-Patent Office objectives.

Several examples come to mind. During my tenure as Commissioner, the Administration launched a program, involving the Department of Commerce and other governmental units, to study and improve the policies and techniques involved in the development and commercial utilization of new technology. In part, this included the so-called ETIP program. The Patent Office was called upon to participate in this effort, and made significant contributions of the time and skills of some of its key personnel.

A second example concerns the effort to develop an improved Government Patent Policy. This also involved similar requests involvement and Patent Office contributions. One specific aspect of this matter concerned the activities of the interagency committee on Government Patent policy, chaired by the Assistant Secretary for Science and Technology.

A third example concerns the development of a program relationg to "Technology Assessment and Forecast". This effort was incubated and hatched in the Patent Office prior to the time I became Commissioner. It was continued and expanded thereafter within the Department of Commerce, under the supervision and control of the Assistant Secretary for Science and Technology, and an "Office of Technology Assessment and Forecast" was established within the Department of Commerce. Its director was, and I believe still is, a Grade 17 employee of the Patent Office. At the time I left the Patent Office, he was continuing to devote full time and attention to that activity, which was of great interest to the Secretary and to the Assistant Secretary for Science and Technology. This program is based upon data derived from Patent Office records; and the substantial effort involved in extracting, compiling and utilizing this information has been largely provided by Patent Examiners and other highly qualified personnel on the staff and payroll of the Patent Office.

The initial publication of the Office of Technology Assessment and Forecast was issued in the Spring of 1973. The "Introduction" stated that it resulted "from a recently instituted Commerce Department Technology Assessment and Forecast Program. This program, established under the Office of the Assistant Secretary for Science and Technology, constitutes a new information source for business and industry." The publication does not purport to be a Patent Office report, nor is the program represented as being a Patent Office program. By reference to these several examples, I do not intend to question the desirability or the importance of such activities as they represent, nor to question whether such activities represent proper matters of legitimate concern to the Department of Commerce. My concern derives from the fact that in each such instance, Patent Office involvement in these matters was directed by the