discussion-but I think it important to raise one question. Will we of necessity overcome the alleged problems with the existing structure of the Patent Office in the Department of Commerce merely by going to the independent agency? I have my serious doubts. I don't think it is worth the risk doing so, at least not without a complete and thoroughly weighing of all the pros and cons, and without first attempting to resolve the alleged problems within the confines of the existing administrative structure.

Just to mention a few thoughts of Professor Fesler about this idea of complete independence, first of all with reference to the Chief Executive, S. 1321 doesn't point out anything about removal. It talks about appointment but is the Commissioner to be appointed for an indefinite term? There have been some interesting cases involving tests of the President's authority or lack of it to remove the head of an independent agency. Suppose you get the head of an agency-the Commissioner in this case-who just doesn't measure up according to someone's judgement. In that event who takes what action? I merely raise the question; I don't and won't have the answer, not without considerable study at any rate.

As far as this independence from the legislature, well, the agency, naturally will require financial support and basic authority, both of which it will get from the legislature. The legislature can control the purse strings. Maybe the independence is again transparent and not at all real, if by controlling the purse strings the legislature can control the operation of the agency. The same thing would apply to Chief Executive, I guess, if the agency head needs clearance or cooperation from the executive line departments. Possibly he won't need it from the OMB, but if he needs it from the Comptroller General there is bound to be exerted some kind of control. Will such control be better than what is available now in the Commerce Department? All I am saying here is that when we think of independence we better think fully how far we can go, and whether we will really gain the objectives that S. 1321 talks about.

Another point that Professor Fesler suggests and discusses is the price of independence. This is exceedingly important. Are we willing to pay the price? There is definitely a need for policy coordination in the operation of the Patent Office. The public has the right to expect that the left hand should know what the right hand is doing. Will we be able to coordinate what the Patent Office does with the Federal Trade Commission, with the Justice Department and other departments any better than we do now with the Patent Office in the Commerce Department? That is the first question. I think it needs to be answered. It certainly needs to be studied.

Second, is the question of setting performance standards. The bill suggests that there will be an advisory council. Well, we have learned from history that independent agencies-well, the fact is that even line agencies of government have their clientele, so to speak, and pretty soon the clientele come in and effectively set the standards. How independent will the advisory council be? These are questions I can't answer at this time, but I do raise them as somethings that have to be answered before we go to such a drastic change as an independent agency status for the Patent Office.

A third and last point that Professor Fesler makes on the issue of the price of independence is the question of vesting authority in an agency that is not subject to an official who answers to the people, in other words, a nonelected official. Today, with the Patent Office in the Commerce Department, whether or not we find flaws with the administrative structure or with the personnel involved, at least the presidentially appointed officers are answerable to the electorate. If the electorate is dissatisfied with the management of any phase of the executive branch it can bring about changes by asserting itself at the polls. The independent regulatory agency is devoid of responsiblity to the electorate because it is insulated from the voters. This has been one of the problems pointed out by many authors about our regulatory agencies today. In view of this I must ask whether the proposal to make the Patent Office an independent agency will add a problem rather than solve one?

Well it seems to me, Senator, that there are at this time more important substantive issues affecting the American patent system that require the attention of the Congress than that of entertaining purely administrative proposals which are so drastic as almost to be revolutionary. Perhaps, after the Patent Office has had an opportunity to accommodate its operations to the handling of the proposed immediate substantive changes, the time will become more appropriate to consider whether the office basically responsible for the operations of the American patent system would best be administered essentially as an independent agency or to be continued as a segment of a major Federal department.

In conclusion, sir, on behalf of NAM and for myself I wish to state that we are pleased that the present hearings may be the first sign of forthcoming patent law revision in various substantive areas that have been under study for some time. These matters and international proposals, including for example the patent cooperation treaty, indeed warrant direct legislative attention. The viability of American industry-and I might add the importance of it to all inventors large and small-stands to be basically affected by such positive activity.

Thank you very much.

Senator HART. Thank you Dr. Forman. I should for the record ask you to clarify to the extent you can the way NAM develops its. positions. We have raised this with other witnesses speaking for associations and groups. How do you reach a position? How many participants do you have? What is this machinery?

Dr. FORMAN. Senator Hart, we have here today my colleague, Mr. Bennett, who is a vice president of NAM. I think he is better qualified than I to answer that particular question. May I ask him to speak?

Senator HART. Yes. Did you get the question?

Mr. BENNETT. Yes, I did, Senator. My name is Reynold Bennett and I am vice president for industrial innovation of the NAM and this area involves the Patents Committee, the Science and Technology Committee, and two other committees. But with regard to your question more specifically, the NAM and its policies, Senator, its policies are approved by the board of directors of the NAM and

they go to the board of directors through the various policy committees. In other words, we have a Committee on Patents that consists of about 150 members. And when I say 150 members, they are individuals from a cross section of companies in the United States that are represented in this committee; that is, not only are they from the companies, Senator, but also we have some private practitioners on the committee who in a sense represent smaller inventors or paten

tees.

The policy positions are general in their statements. For instance, we have a general policy on patents. But when issues become more important or important enough, although they seem to be more specific, then the policy committee and the board of directors will act on them. Specifically, the board of directors of the NAM has acted on maintenance fees. This goes back a few years, at a time when there was a great discussion on maintenance fees. The board then took the position that, in effect, it was opposed to maintenance fees with certain reservations, which Dr. Forman spoke about in his testimony this morning. Also, the same way with regard to fees to support the Patent Office. The board of directors of the NAM a number of years ago took a position in that regard and again this was enunciated quite well by Dr. Forman this morning. With regard to the membership of the Patents Committee of the NAM, the 150 members I mentioned and also the members of the board of directors, we would be pleased to submit the names of those individuals and their companies if that can be helpful to you.

Senator HART. It would be and we have made that request of others. Thank you for volunteering that information.

Dr. FORMAN. Senator Hart, on the question of volunteering. I wonder if I might retrospectively request that the documents I gave you my article concerning a proposal for an incontestable patent and your letter to me concerning it-be introduced in the record?

Senator HART. Yes. As a matter of fact I should have made that suggestion myself. I did leaf through it again as you were testifying and, if there is no objection, we will print it in the appendix of the

record.

There is one thing-and this is not to develop any distinctions or certainly suggest that what you told us isn't the NAM position. because I know it is-but, Mr. Bennett, specifically on the question of an independent agency, is that position of the NAM the reflection of the application of a general attitude or a specific reference to this particular bill?

Mr. BENNETT. Well, as I stated before, the NAM has a general position on patents that doesn't really filter down to this point as to administration. May I say this, the way we approached the current hearings was this way: We drafted what we thought was a general approach to the five points that were brought up and enunciated. This was a 10-page statement or an exposition or discussion or white paper-whatever you want to call it-and this was sent out to the 150 members of the NAM Patents Committee for comments. We received back, oh, I would say about as many as 55 comments which I think is quite good, as a matter of fact, and it did represent a cross-section of opinions. When I say cross-section, I mean some came from chemical companies, some came from individual practi

tioners and so on. Then an ad hoc committee met to discuss the five points. Again, this ad hoc committee was a cross section from various segments of industry and it considered the draft white paper. The members had this beforehand. They considered the responses we got from the Patents Committee and they spent a full day in discussing various suggestions.

I might say also to that that Commissioner Gottschalk was there at the outset and indicated some of the matters that he did indicate here today to this committee so they had that to consider too.1 And you brought the question up as to the administrative aspect. As a matter of fact, former Commissioner Brenner was also there and we had the benefit of some discussion from him on this point. The total effect was that we devised what we believed was a consensus in coming up with our recent statement.

Senator HART. The membership of the ad hoc committee was drawn from the Patent Committee basically?

Mr. BENNETT. Yes, it was.

Senator HART. Thank you very much.

Mr. Brennan?

Mr. BRENNAN. No questions.

Senator HART. Mr. Nash?

Mr. NASH. No questions.

Senator HART. I do want to ask about-and I am trying to find the place

Dr. FORMAN. Was that in our formal statement, sir?

Senator HART. I do want to ask about-well, do I understand that the Patent Office administratively has instituted a program with a 212-year limit sort of a deferred examination system?

Dr. FORMAN. Yes, I have the formal announcement of the program as it appeared in the Federal Register. Mr. Nash, may I please give you it?

Mr. NASH. Sure.

Dr. FORMAN. This is a copy sir, of that defensive program enunciated earlier.

Senator HART. I think that would be useful to have that printed at this point in the record.

[The document referred to follows:]

From the Federal Register, April 11, 1968

TITLE 37-PATENTS, TRADEMARKS, AND COPYRIGHTS

CHAPTER I-PATENT OFFICE, DEPARTMENT OF COMMERCE; PART 1-RULES OF PRACTICE IN PATENT CASES; PART 3-FORMS FOR PATENT CASES

NEW DEFENSIVE PUBLICATION PROGRAM; ADDITIONAL FORM

Sections 1.11, 1.14, 1.101, 1.103, and 1.108 of Title 37 CFR (Patent Rules 11, 14, 101, 103, and 108) are amended or revised and a new § 1.139 (Patent Rule 139) is added to take effect May 1, 1968, for the purpose of instituting a new defensive publication program. A new § 3.50 is added for the purpose of implementing the new program.

The general substance of the proposed revisions and additions was published in the Federal Register of February 20, 1968 (33 F.R. 3189). A hearing was

1 Mr. Gottschalk spoke generally on Patent matters to a group which included some from the smaller NAM group referred to which met later to discuss S. 1321. specifically. He did not participate in NAM deliberations on its position regarding S. 1321.

held on March 27, 1968, and all persons, who desired to, were invited to attend and to submit their views, objections, recommendations or suggestions. Both oral and written comments were carefully considered. The sections are being revised substantially as published with a few additional changes.

This program is intended to provide better service to the public by making available the technical disclosure of certain applications in which the owner may prefer to publish an abstract in lieu of obtaining an examination by the Patent Office. The defensive publication would be in the form of an abstract of the technical disclosure, printed in the Official Gazette and made a part of the Patent Office search files.

This program will be open to any applicant having an application awaiting action by the Patent Office and who files a written request no later than eight (8) months after the earliest U.S. effective filing date of the designated application and agrees to the conditions of the program, including waiving his patent rights based on the designated application, opening the complete application to inspection by the general public upon publication of the abstract, expressly abandoning his application, the abandonment to take effect five (5) years after the earliest U.S. effective filing date of the application unless within that period interference proceedings have been initiated, and waiving his rights to a patent on a continuing application filed after the expiration of thirty (30) months from the earliest U.S. effective filing date of the designated application. Until November 1, 1968, this program will be open to any pending application awaiting first action by the Patent Office at the time of the request without regard to the filing date of that application.

In accordance with existing rules and procedures interferences may be declared with applications and patents. During the period beginning with the suggestion of claims by the Patent Office or the filing of claims by the applicant copied from a patent and ending with the termination of proceedings if an interference is declared or the mailing of a decision refusing to declare the interference, abandonment by reason of the expiration of the 5-year period will be stayed. Since the applicant has waived his patent rights and agreed to a defensive publication, termination of interference proceedings in his favor would render the express abandonment ineffective but would not result in the issuance of an enforceable patent. Instead, a normal Notice of Allowance would be issued except that the applicant would be notified that when the issue fee is remitted a disclaimer of the entire term of the patent to be granted in accordance with the second paragraph of 35 U.S.C. 253 should be included.

No special fees will be required for entrance into this program. The applicant will be permitted to include with his request a replacement or expanded abstract of the technical disclosure of up to two hundred (200) words. Acceptance of a request to enter this program will be contingent upon screening by the Patent Office to exclude such material that may be considered advertising, frivolous, scandalous, against public policy, subject to national security controls, etc. Acceptance of a designated application in this program is not intended to preclude the examination of any continuing application filed under 35 U.S.C. 120 within thirty (30) months after the earliest effective U.S. filing date of the designated application.

Upon receipt and approval of the request the application abstract will be published in the Official Gazette. Publication of the abstract in the Official Gazette would be in a separate section identifying the application as being open for inspection by the general public and indicating that it is subject to the New Defensive Publication Program.

Following publication the application would be filed in the Record Section of the Patent Reference Branch where it will be available for inspection upon written request. Copies of the application will be furnished by the Patent Office upon request and payment of fee. The application abstract and suitable drawing copies would then be made a part of the official search files.

After the defensive publication has appeared in the Official Gazette the abstract and suitable drawing copies will be available as prior art from the date of publication under 35 U.S.C. 102(a) or 102(b) as a printed publication. Also, at this time the application will be available as prior art under 35 U.S.C. 102 (a) as evidence of prior knowledge from the actual date of filing the application in the Patent Office.