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tively, he helps to provide a needed balance to the one-sided, ex parte nature of present proceedings and to that extent contributes to the integrity of the patent system in the same sense that a well-administered opposition proceeding does.

In supporting this innovation, however, some cautionary comments are in order. The principal task of the Public Counsel is, and should be, to play the role of devil's advocate, to say why a patent should not issue on a given application. Recognizing that applications now run at the level of 100,000 a year, inerely reviewing pending applications and taking positions on those calling for action on his part, even though this latter function is carried out on a highly selective basis, could prove a massive undertaking. To impose duties upon the Public Counsel that go beyond this specific role would in all likelihood result in either spreading the work of his staff so thin as to render its performance inadequate or creating within the Patent Office a new department of massive and cumbersome proportions. And even if workable in other respects, serious confusion of roles (confusing to the public, the Patent Office staff and the Public Counsel himself) could result from simultaneously or successively playing such somewhat varied roles as defender of the public interest in quality patents and defender of examiner action on appeal.

Here, in short, it would seem wise to proceed slowly with this novel and experimental arrangement, by holding the Public Counsel's function to the devil's advocate role, and trying it out in this limited area before broadening out into other fields.

It would be inappropriate to leave the two proposals heretofore discussed, both of which are designed to provide greater assurance of validity with respect to an issued patent, without mentioning one other cause of our present difficulties in this respect. Improvement in the procedures for determining and evaluating the prior art will help greatly in preventing the issuance of spurious patents, but it will not completely solve the problem. Those who must pass on the validity of patents, whether the Patent Office or the courts, find themselves impaled on the horns of a dilemma. With only one single reward available for a given novel contribution, namely, a 17-year exclusive right in the invention, the decision-maker often finds himself confronted with a situation in which an inventor has made a substantial, but not outstanding, contribution, with the result that granting him a patent gives him too much and denying him a patent gives him too little. In this situation, there is no room for a “right" decision in terms of what the patent system seeks to accomplish, namely, a reward or stimulus that is appropriately keyed to the contribution or effort. As I expressed it twenty-five years ago, our patent grant is comparable to

“a system in which every worker receives, say, ten dollars a day, irrespective of whether he is a college graduate or an illiterate, capable of a lard day's work or a weakling, industrious or one who soldiers on the job." (Invention and Public Policy, 12 Law & Contemporary Problems, 649, 608

(1947)). As long as this situation continues, decision-makers are going to differ as to whether they should give too much or too little, no matter how complete the evidence of prior art and analysis of the inventive contribution may be. The answer, of course, is to inject a flexibility into the patent system that its present “one-price" system lacks. Thert are various ways to do this. Petty patents, patents of addition, some relaxation of the double-patenting rule, tailoring of claims, and selective variations in the scope of relief granted, iminediately come to mind. Unfortunately, S. 1321 is silent on this point. Before it is through, the Subcommittee may wish to give some thought to this aspect of the patent problem.


In the foregoing discussion of opposition proceedings and the Public Counsel, the primary concern was to improve the integrity of the issued patent. The remaining points to be discussed center on tht procedural and structural aspects of the system, especially as they affect the cost and delay in obtaining and enforcing patents.

The first of these to consider is the proposal for deferred examination. Sections 191 and 192 provide that an application shall, unless applicant requests immediate examination at the time he files, be published following an examination “as to formal matters and other such matters as the Commissioner may prescribe.” Thereafter, within a period of 5 years, a request for examination may be filed by applicant, Public Counsel or any other person who is prepared to pay the examination fee. If no request is filed within 5 years, the application lapses. Although the bill is not explicit on this score, no enforceable patent rights apparently arise until such examination occurs and the Patent Office formally “issues” the patent (section 151). Section 153(b) provides for extension of the patent term (which, under S. 1321, begins to run as of date of application) by the period of deferment, so that the period of enforcceabil. ity will not be less than it would have been had there been no deferment-indeed, under section 153(b) as phrased the term might be lengthened to some extent.

The concept of deferred examination has virtues, but it also has vices. Consequently, it should be explored sympathetically and receptively, but also carefully and critically. Its main advantages are that it relieves both the applicant and the Patent Office of the burden, expense and delay of extensive controversy over the details, in terms of both validity and scope, of an applicationcontroversy which may ultimately prove to have been a waste of time because no third party shows sufficient interest in the invention either to challenge it or negotiate rights under it-a fate that appa rently befalls a substantial proportion of issned patents at the present time. Deferred examination also means more expeditious disclosure, resulting in benefits to the public generally. A marginal advantage, but unfortunately one that appears to have received undue emphasis in the moves to introduce deferred examination, is that it would help reduce the backlog that typically plagues patent offices, our own included.

The dangers of a deferred examination are that, improperly administered, it can let loose on the patent a spate of inadequately conceived and inadequately formulated patents or potential patents that provide little useful and novel information and create a multitude of actual and potential harriers to freedom of use, and impose heavy burdens of examination, review and possible litigation upon would-be users. It can also prove to be a pitfall to the unsuspecting applicant who finds his idea publicly disclosed, but is ultimately denied a patent and ends up with nothing as a result. Finally, to the extent that applications are encouraged that otherwise would not be filed, the effort to clear up the backlog may prove self-defeating.

In the light of these considerations, it would seem wise to proceed with the idea, but to do so cautiously. Initially, the experience of those countries, spearheaded by the Netherlands, that have instituted a deferred examination proces dure should be studied and the present proposal reexamined in the light of what that study discloses. In exploring possible modifications of the present proposal, the Subcommittee might give thought to the following possible considerations: (1) providing an initial screening, though short of a full examination, that would dens even a provisional issuance of any application that failed to meet standards of clear, full and adequate disclosure or involved only an idea that would be clearly unpatentable by patent law standards: (?) undertake at least a preliminary review of the prior art and append to the issued application a statement and eraluation thereof so the public (and the applicant) would have some idea of the nature and extent of the contribution and consequently the probabilities as to validity; (3) permit the applicant to withdraw or modify his application at any time prior to issuance so as not to lose such possible trade secret rights as he might possess; and (4) develop a fee structure that would be high enough to discourage frivolous or nuisance applications and at the same time low enough to provide applicants (and, collaterally, the Patent Office) with genuine benefits from the procedure-a delicate and difficult balancing act, I concede, but not an impossible one.

I deferred examination procedure that embodied the foregoing conditions should result in issuances of sufficiently probable validity that it wou be appropriate to have legal rights under the patent begin to run from the date of issuance contingent, of course, on the patent being subsequently validated instead of running only from the date of validation.

Before leaving this subject, let me make briefly four additional observations. (1) The deferred examination procedure fits in with the concept of an opposition procedure, and complements that procedure, in that opportunity exists for third parties to provide the Patent Office with evidence and argument as to why a patent should not be valid. (2) The procedure also fits in with the con. cept, to be discussed next, that the fees charged an applicant should be as

light as possible at the beginning when the return from the invention is small and its value conjectural, and increase later if and when the invention proves its worth. (3) It also fits in well with the concept of defensive patenting which has operated in some measure in recent times. (4.) Although there is currently under consideration a voluntary semi-opposition procedure that would partially perform the function that the deferred examination and opposition procedures of S. 1321 contemplates, it would seem preferable to write these into the statute rather than leave them to the legal and operational uncertainties that necessarily attend a voluntary, nonstatutory procedure.


Section 41 of S. 1321 provides for a fee structure that departs in several respects from present law. One, it leaves the setting of specific fees to the Commissioner, except for putting a ceiling (of $100 for each fee) on initial fees and on the maintenance fees charged during the first three years, and a floor (of $1000, increasing by 15% a year) on maintenance fees beginning with the fourth year. Two, as just indicated, it provides for small initial fees and a small inaintenance fee during the early years and a very substantial annual maintenance fee thereafter, with a provision for waiver if the patent is surrendered within four years after issuance, and for some deferment of fee payment, up to ten years under certain circumstances. Three, the Commissioner is empowered to grant substantial exemptions (up to 50% of regular fees and up to 80% of maintenance fees) to individual inventors and small businessmen. Fourth, fees are to be set on a basis that will make the Patent Office 65–75% self-sustaining.

Some of these provisions have considerable merit, at least in principle. As previously stated, a policy of keeping costs low at the stage when the invention is producing little or no income-especially since these Patent Office fees follow hard upon the heels of the bulk of one's research expense and professional fees-and then offsetting the early low charges with higher charges later, seems sound both as a matter of equity and as a means of maximizing inventive stimulus. This is what the maintenance fee structure does, in addition to providing an effective means of washing out those patents that prove to be of no enduring economic significance-a sort of street-cleaning job). The soundness of the approach is suggested by the fact that most other countries have a long-standing maintenance fee system and show no disposition to abandon it. The concept of providing special concessions in hardship cases, typically cases involving individual inventors and sinall businessmen, also appears sound. It would seem preferable, however, that some body more experienced in these matters than the Commissioner of Patents, such as the Small Business Administration, be given the job of processing these cases and that decisions be based on equities and hardship rather than on whether one is a large or small concern, an individual or a corporation.

My main reservations concerning the proposed fee structure are three-fold : (1) Because of the administrative burden and chances for slip-up involved, it would seem much better if maintenance fees were to be omitted during the early years of the patent-say, the first five years after issuance—and then assessed only periodically, perhaps every three years thereafter.

(2) The maintenance fee schedule that would apply after the third year strikes me as seriously out of line, both in terms of the disproportionate charge as compared to the cost of processing patent applications and in terms of the cold water it throws on the fire of invention and innovation. It seems to suggest to the inventor and those in privity with him that his patent is an unwanted evil and that everything possible will be done, once he has obtained it, to force him to get rid of it. This seems hardly the way to achieve the Constitutional purpose of promoting the progress of science and useful arts through the grant of patents. Furthermore, it leaves the impression that maintenance fees are being used as a cover-up to collect much higher fees instead of being used in the legitimate fashion for which they should be used.

(3) Granted that there exists a long-standing tendency to think of the Patent Office as an institution that should be entirely or substantially self-sustaining-indeed, the Patent Office itself embraced that attitude not too many years back-the principle does not hold up well under close examination. Either the patent system is in the public interest or it is not. If it is not, we should get rid of it. If it is, as the Founding Fathers and most of their progeny have firmly believed, we should give it the support needed to enable it to work effectively. Certainly, considering the nature and extent of the modern federal budget, any contention that we cannot afford to do so is singularly unconvincing. This is not to say that the patentee should pay no fees at all or only nominal fees. It is only fair that he should pay his way to some extent. Furthermore, fees should be high enough to make the applicant ask, “Is this trip necessary?” It is to say, however, that Patent Office fees should not be used to make money on the patentee, and further that they should not be so high as to drive inventors ont of the market. These observations become ali the more relevant considering the fact that as inventions become more complex, applicable art more voluminous, and the collection of relevant data more thorough, processing costs are likely to go higher rather than lower. It seems somewhat anomalous and inconsistent with the "stimulus" theory that under. lies the patent system to box ourselves into a situation in which the more effective we become in screening out patents that should not issue, the more we charge the patentee in case one does issue.

One last word concerning maintenance fees. Like opposition proceedings, such fees have a long history in Europe, as I have previously mentioned. As a prelude to their introduction here, a careful study of their operation elsewhere should be made, so that we can profit from the experience of other countries.


Section 2 of S. 1321 sets up the Patent Office as an independent agency. My comments on this proposal will be very brief.

The primary function of the Patent Office is to pass upon patent applications, a quasi-judicial responsibility. In discharging this responsibility, it would seem desirable that the Office operate independently of the Executive departments, such as the Department of Commerce.

S. 1321 does contain some provisions designed to perform services to the public (see, for instance, sections 6(a) and 8(f)), which might appropriately be left to the Department of Commerce if this were deemed desirable provided unnecessary duplication and loss of efficiency could be avoided. What effect separation from the Department of Commerce would have in terms of personnel, operating efficiency and budgetary considerations, is a matter on which I do not feel qualified to comment, but it is hard to see how the interests of the Patent Office and its efficient operation could be hurt by such a move.

6. MISCELLAXEOUS PROVISIONS The foregoing comments complete my testimony on the points to which, as I understand it, the Subcommittee wished to direct its attention in this set of hearings. There are, of course, many other features of the bill that are of considerable significance, some of them salutary, some of them not. There are also certain provisions which might well have been included, but were not. I will not attempt here to do anything more than merely list some of these items, but if the Subcommittee should be interested at a later date in exploring them and others, I will be glad to develop my views in more detail at that time. al. Jiscellaneous items of a salutary mature

Among the provisions in the bill that strike me as desirable, granted that some of them may need revision of sorts, are the following:

(1) Section 6(e) calling for both research and development in the area of mechanized searching. (Recognizing that sporadic efforts have been made and are currently being made by the Patent Office to develop competency in this a rea, and recognizing also that serious problems arise in using mechanized searching effectively, increasing reliance upon such methods seems both ineri. table and indispensable to adequate performance in future patent administration. Indeed, a time could come when the test of what constitutes prior art will be determined by what comes out of the computer. Consequently, we had better be getting on with the business, and a mandate to the Patent Office from the Congress to this effect would seem quite in order.)

(2) Provisions designed to give greater assistance and service to the public, exemplified by sections 6(a), 6(d) and 8(f).

(3) The provisions of section 147, giving the Court of Appeals of the District of Columbia jurisdiction to review decisions of the Court of Customs and

Patent Appeals. (One may grant the high level of sophistication and competency in patent matters that exists in the CCPA. At the same time, the anomaly of the comparable District Court proceeding being subject to intermediate review while the CCPA proceeding is not, the fact that ways are being sought to reduce the burden on the Supreme Court by providing more intermediate appeals, the recognition that historically the CCPA was set up to assist the District Court, and finally, the difficulties that arise when the CCPA and the Court of Appeals take inconsistent positions, as they have done now and then, all suggest the desirability of at least exploring this proposal carefully and receptively.)

(5) The provisions of section 101(a) setting a one-year limit on the pre-application activities that one can invoke in establishing one's date of invention. (The considerations that, in my opinion, make this provision desirable are set forth in considerable detail in a talk I gave in 1971, published in 2 I.I.C. 241 (1971), a copy of which is attached. This provision in section 104 (a) is implemented by the provision in section 112(a) requiring the applicant to set forth in his specification the invention dates upon which he intends to rely.)

(6) The provision in section 112(b) requiring specific disclosure of just what the invention covers. See also section 104(c). (Cf. Guide v. Desperak, 144 F. Supp. 182 (SD NY 1956)). 6. Viscellaneous items of a doubtful nature

On the other hand, S. 1321 contains a number of provisions that are of questionable merit, at least in the light of present knowledge. It may be that more thorough research would show a need for the provision or some modification thereof, but inclusion at this stage seems inadvisable in the absence of such a showing.

Among these proposals are the following:

(1) The inclusion in sections 102(a) and (b) of foreign public use and sale as relevant prior art. (Some modilcation of this provision, e.g., use or sale which is actually known in the United States, or knowledge of which is reasonably and readily accessible, might ultimately be desirable, both because of its relation to applicant's actual public contribution and because it would constitute a desirable step toward international harmonization. In its present sweeping form, however, the proposal could create an almost insuperable barrier to a firm finding of validity and enormously add to the burdens and cost of litigation.)

(2) Section 112(a) requiring the disclosure of “all know-how known to the inventor," if the provision is interpreted as going beyond the present requirement of adequate disclosure.

(3) Section 153, reducing the term of a patent to 12 years from date of application.

(4) Section 286, reducing the statute of limitations to 2 years.

(5) Section 122 providing for publication of applications, and related provisions such as section 134 which makes proceedings before the Board of Appeals public.

(6) Certain provisions that arbitrarily limit the area of patentability, such as the provision in section 104(e) barring patents based upon the perception of a problem, the provisions of section 201(c) barring broadened reissues, and section 203(c) blocking the “terminal disclaimer" solution to the double-patenting problem. (These provisions appear unduly sweeping in their application and, in my opinion, should either be modified or the law left standing as it is at present.)

(7) Section 263, which guarantees compensation to employee inventors in addition to regular salary. (While this section addresses itself to a problem with which Congress properly should concern itself, the issue is one that does not involve the operation of the patent system as such. Consequently, its inclusion in the patent statute strikes me as inappropriate. In this respect it is comparable to the antitrust and Government patent policy issues-a matter to be handled separate from the patent law revision.)

So much for the miscellaneous provisions. As I pointed out previously, the foregoing lists of supported inclusions and suggested deletions by no means cover all the features in S. 1321 that call for comment. Rather, they constitute a selective list of those items that I would single out at this point for special attention, leaving other matters for the future.

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