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Many of these lawyers are members of private firms specializing in patent law; many are members of corporation patent departments. On any given occasion, some of our members are seeking to obtain or to enforce patents on inventions and others are working to avoid or to invalidate the patents granted to persons other than their clients.

Despite this wide variety of objectives with respect to specific patents, I think that essentially all of our members share the belief that the United States patent system has been a constructive feature of our political and economic scheme and that it has played an important part in stimulating the creation and introduction of new technological developments. Speaking generally, we are in favor of anything which will strengthen this system and add to its reliability and are opposed to whatever seems calculated to weaken the incentives it provides.

It is popular to blame many of the current problems of society on our advanced state of technology. This is said to be the cause of our environmental difficulties, our materialism, the effect of the automobile on our cities and so on. The fact remains that the solution of many of the most aggravated of these situations lies in the development of still more technology. We can't hope to cure the problems caused by the automobile by going back to the horse.

if our patent system is to provide effective incentives for invention and innovation, we should avoid provisions which make the whole procedure of obtaining a patent unduly expensive and burdensome to the applicant. If the mere filing of a patent application exposes the applicant to harassment, great expense, the possibility of becoming involved in litigation outside his control, and the need to divulge his invention to the world, including his competitors, before he has any sort of assurance that he will obtain patent protection, many individuals and companies will decide that the game is not worth the candle. The result would be to stifle rather than to promote the development of technology and the disclosure of new discoveries.

Valuable inventions are made both by individual inventors and by persons employed by corporations. So far as the public interest in obtaining solutions to the technical problems of the day is concerned, it is immaterial which sort of inventor solves the problem. It is therefore important that the incentives to make the necessary developments be uniformly available to all applicants.

The Board of Managers of our Association has recently given its approval to a proposed patent revision bill and we have requested the chairman of the Subcommittee to have a copy included in the record of these hearings so it will be available for your consideration. In most respects this proposed bill is similar to S. 643 of the 92nd Congress. Our committees have carefully studied the previous bill and the objections thereto which have been raised * in various quarters and have redefined some of its provisions to overcome as many objections as possible. We believe our proposed bill represents a consensus on how best to revise the patent laws to achieve in the present day world the purposes which the patent system should fulfill. While there is no unanimity among our members on its provisions, we are prepared to and do support it.

Our proposed bill differs from S. 1321 with respect to every one of the five subjects to which these hearings are primarily directed. The strength of our opposition to these subjects as treated in S. 1321, however, is not the same in every case. I will discuss each proposal separately.

Incidentally, at the meeting of our Association to be held next month, on October 11 and 12, we have scheduled symposia on the subjects of oppositions, deferred examination and maintenance fees as they have actually worked in foreign countries. European and domestic patent counsel will participate. The information developed through these discussions should cast further light on whether these practices might, in some form, improve the patent system in this country.

ADVERSARY PROCEEDINGS DURING EXAMINATION

In our proposed bill, we have not provided for any opposition or reexamination prior to issue of the patent, but have included in Sections 191 and 192 provision for reexamination after issuance.

We definitely favor providing some opportunity for members of the public to come in with prior art or other information, which may demonstrate that the invention is not patentable. We agree that this should help to weed out

some undeserving patents and also to persuade the courts to give greater effect to the presumption of validity for patents which have been exposed to this procedure. Sections 191 and 192 of our proposed bill are believed to accomplish this with a minimum of chances for harassment and oppression.

Our concerns with the procedure set forth in Section 135 of s. 1321 include (a) the added expense to the Patent Office and therefore to the public of having to publish applications twice, once prior to opposition and again at time of grant; (b) exposure of the applicant to the possibility of harassment by way of extensive discovery, either by the Public Counsel or by "any party”; (c) the added expense to the applicant of a full-blown inter partes proceeding, particularly if prior to indication of patentability such as to justify such expense; and (d) the lengthy delays in issuance which could oceur if a number of persons choose to intervene.

If adversary examination procedures prior to issue should be adopted, we strongly urge that the reexamination not take place until the Patent Office has indicated the application to be allowable, that the reexamination process not be repeated after issue and that the term of the patent not be shortened as a result of the time used in the reexamination proceedings. Postponing reexamination after the case has been found allowable would at least give potential opposers a better idea of the scope of claim which might issue and would avoid making the applicant publish his invention before he has some reasonable prospect of obtaining protection in return.

If provision for reexamination is included in the bill, it would seem desirable and might be specified that the reexamination would be by a different person from the examiner who handled the case initially. This should make for a greater degree of objectivity. It has been suggested that any reexamination be by the Board of Appeals.

PUBLIC COUNBEL

We readily agree that patents should not issue on unpatentable inventions, but have difficulty in seeing how creation of the office of Public Counsel can accomplish very much in this regard except at great expense. Our problem is with the practicality of the proposal rather than with the principle.

We do not see how the Public Counsel could hope to do a thorough independent job of examining selected applications unless he had a staff more or less duplicating that of the regular examining corps. Many of the duties giren the Public Counsel in S. 1321 are already performed by someone else. Thus the Patent Office Solicitor and Law Examiners now represent the Patent Office in appeals and contested cases. The Commissioner regularly carries on a quality control program, though this could be considerably more effective if more funds were available.

It is not clear to us how the Public Counsel and his staff would know when to intervene in a pending application. With the subpoena power there is at least the possibility that decisions to intervene might be arbitrary, might be a form of harassment of specific applicants, and might be made for reasons other than the only legitimate one, which is to assure that only high quality patents issue. Creation of the Public Counsel might also appear to denigrate the patent examining operation and result in a lesser feeling of responsibility, lower morale and a generally lower level of effectiveness on the part of the examining corps. We tend to think that more could be obtained in improving the quality of patents by expending added monies in strengthening the examining staff and the present quality control program.

DEFERRED EXAMINATION

Provision for deferred examination has not been included in our proposed bill, though it would obviously be desirable to avoid the effort of examining those applications which, after the passage of some years, either seem unpatentable to the applicants or are of so little interest to them that examination is not requested.

There are, however distinct disadvantages. Early publication of applications, before there is any indication that they will be allowable, is unfair to the applicant and will lead to inventions being kept secret instead of being filed on.

If deferred examination is introduced, it will be necessary for the Patent Office to publish all applications subject to deferral and later to publish again those that have become patents. Under current practice applications which do not become patents never must be published. As a result deferred examination would entail a substantial increase in printing costs for the Patent Office.

Deferred examination has an adverse effect on the users of inventions. During the period of deferral there is uncertainty whether the application will ever become patented and what subject matter will be within its ultimate claims if examination is requested. Each possible user must conduct his own examination of those applications which might affect him. Separate examinations by all potential users would be wasteful as compared with a single examination, by the Patent Office.

Most countries where deferred examination has been adopted were faced with intolerable backlogs of unexamined applications, so that it was almost a matter of necessity to adopt this procedure. The situation is quite different here where the backlog has been dropping steadily and is by no means unmanageable. We are not convinced that the advantages of deferred examination overcomes the disincentives and possibility of additional costs that accompany it.

If deferred examination should be adopted, there would be no need to publish those applications where examination is requested immediately, and it would seem desirable not to do so.

MAINTENANCE FEES

While the patent bar in this country has been historically and uniformly opposed to maintenance fees, there is currently some sentiment that such fees, if reasonable in amount and non-discriminatory, might be preferable to further increases in the filing and issue fees.

If maintenance fees should be instituted, they should not be so large as to make it prohibitive to keep in force patents which may not yet have produced any income but which have a reasonable chance of producing such income in the future. An inventor who has complied with his part of the bargain and disclosed his invention to the public should not have his right of exclusion taxed away simply to satisfy some preconception that the fewer patents in force the better. The maintenance fees called for by S. 1321 seem entirely too high and border on being confiscatory.

Even when kept reasonable in amount, maintenance fees are inherently burdensome and wasteful in that they involve record-keeping and publication expense to the Patent Office, and effort and expense to the patentee who must periodically decide whether to keep track of when fees are due.

Finally, fees, whatever their nature, should be kept administratively as simple as possible. Fees should not vary according to who owns the patent, nor should there be special exemptions.

In this connection we would urge that the matter of fees be reconsidered generally. At the hearings held by this Subcommittee in May, 1971, the American Patent Law Association submitted a report urging the following basis for fee practice :

(a) costs of examination be divided equally between the Patent Office and the applicant, since the examination process is equally of benefit to the applicant and to the public;

(b) the cost of supplying patent copies and similar services should be charged entirely to the persons receiving the services;

(c) the cost of maintaining search facilities and the Scientific Library, and the printing of patents should be funded entirely from public funds, as representing functions of benefit to the general public rather than to applicants; and

(d) the trademark operation should be entirely self-sustaining, as it is primarily for the benefit of trademark owners.

Similar recommendations were made at the same time by former Commis. sioner Brenner.

We continue to think that this suggested handling of fees would be fairer to applicants and to the public than trying to maintain any arbitrary overall percentage of return. If it were followed, it might well turn out to be unnecessary to look to maintenance fees to supply needed revenue.

ADMINISTRATIVE RESTRUCTURING OF PATENT OFFICE In our proposd version of a patent law revision bill, we have retained language which would leave the Patent Office where it now is, in the Depart

ment of Commerce. Nevertheless many of our members would be pleased to see it become an independent agency. This would give the Commissioner a degree of freedom of operation that would be desirable. On the other hand, it would deprive the Patent Office of the protection afforded by being part of a regular department of the Executive branch and could make its financial stability more precarious.

An alternative, of course, would be to make the Commissioner an Assistant Secretary of Commerce, as is provided in S. 1957 introduced June 7, 1973 by Senator McClellan. This provision was also present in S. 1254 of the previous Congress, which passed the Senate but not the House. Part of the problems of the Patent Office in the past decade or so seem to have resulted from an apparent dilution of the Commissioner's authority because of his position in the administrative structure of the Department of Commerce. This difficulty might be alleviated if he were made an Assistant Secretary.

While the topics discussed so far are those on which comments were particularly solicited, I would like to mention briefly a few of the other provisions of S. 1321 which seem undesirable to us, either because they seem burdensome or would seem to erode the protection which an inventor could obtain and would thus help to destroy the incentive which the system should provide. I will not try to discuss these in detail but would simply like to note some of them. My failure to mention any section, of course, does not necessarily indicate that we approve it.

Section 102(a) would make knowledge or use by others in a foreign country prior to the applicant's invention a bar. Section 102 (b) would similarly make public use or sale in a foreign country more than a year prior to the actual U.S. filing date a bar to patentability. We believe that such foreign knowledge, use or sale is often difficult to discover and that a bona fide applicant having no knowledge of it should not be prevented thereby from obtaining a patent. It is, after all, the encouragement of the development, disclosure and use of technology in the United States that is the central purpose of our patent system.

Under Section 104(e) any desription of a product could be used an a reference even though it did not teach how to make or use the product. Under this provision anyone in the chemical field could preclude patenting entire classes of compounds by publishing lists of theoretical structural formulas without ever having benefitted the public by providing it with the information needed to make the compounds available.

Section 104(e) denies patentability where the inventor has perceived a problem the solution of which is obvious. This is at least too broadly stated for it would seem to cover situations where a technical difficulty could not be solved until someone had ingeniously and unobviously discovered what was causing the difficulty. This is of benefit to the public and should be a patentable discovery even though once the cause is known it would be obvious how to remedy it.

The requirements of Section 112(a) are extremely onerous, particularly in view of the readiness of the courts to find that there has been fraud or lack of candor in connection with the supply of information to the Patent Office. It could often be very difficult for an applicant to be sure he had included in the specification “all .., novel or unexpected properties or results and all ... substantially superior known or obvious properties or results.” Applicants should not be required to supply, in addition to a complete description of the invention, all of the know-how which has been developed with respect to the subject matter of the invention. Much of this know-how can readily be acquired by anyone who wishes to spend the time and money to develop it. Why should an applicant have to disclose it for nothing without having any assurance at all that he will obtain the desired patent protection?

Section 112(b) limits a patentee to the range of equivalents expressly set forth in the specification. This effectively denies him any range of equivalents, since if he knows all the possible ways of evading his patent, he can make his claims broad enough to include them. The doctrine of equivalents was devised to protect the patentee from persons who would copy the substance of the invention while carefully avoiding the literal language of the claims. The applicant cannot be expected to anticipate every form of evasion of this type.

Section 122 provides for the prompt publication of all applications. We believe there should be no publication in any event until the application has

been indicated as allowable, and especially no sooner than eighteen months after the filing date.

Section 153(b) would establish the term of a patent at twelve years dating from the filing date, but with the addition of any time during which the application was deferred. We would be strongly opposed to a reduction of term of this magnitude.

Section 201 (c) would bar any broadened reissue patent. We are in favor of reducing the time during which a broadened reissue may be sought from the two years provided by current law to one year, but see no reason why patentees should be denied any opportunity to correct his claims to give him whatever protection his invention warrants.

Section 263 would require a minimum 2% payment from an employer to an employed inventor for assignment of an invention. The proper resolution of employer-employee rights in inventions is a complicated matter, is the subjet of other proposed legislation, and should not be dealt with in a. general patent revision bill without adequate hearings on this topic.

Section 286 (a) would provide a two-year statute of limitations for infringement suits instead of the six years now provided. Considering the many diffculties that a patentee must overcome to enforce his patent at all, it seems unfair to whittle down his rights in this manner.

Mr. Daxn. Also, I have delivered to the subcommittee a copy of a proposed version of a patent revision bill which the board of managers of our association has recently given approval to, and feeling that this might be helpful in your consideration of these matters, we've asked that this be printed in the record.

Senator HART. So ordered.
The information referred to follows:]

AMERICAN PATENT LAW ASSOCIATION

PART I-PATENT OFFICE Chapter 1. Establishment, Officers, Functions.2. Proceedings in the Patent Office. 3. Practice Before the Patent Office. 4. Patent Fees

Sec. Page 1 1

6 31 9 41 10

21

Chapter 1Establishment, officers, functions Sec. 1. Establishment. 2. Seal. 3. Officers and employees. 4. Restriction on officers and employees as to interest in patents. 5. Bond of Commissioner and other officers. (Omitted) 6. Duties of Commissioner. 7. Board of Appeals. 8. Library. 9. Classification of patents. 10. Certified copies of records. 11. Publications and public services. 12. Research and studies. 13. Copies of patents for public libraries. Section 1.-Establishment

The Patent Office shall be an Office in the Department of Commerce, where records, books, drawings, specifications, and other papers and things pertaining to patents and to trademark registrations shall be kept and preserved, except as otherwise provided by law. Section 2.--Seal

The Patent Office shall have a seal with which letters patent, certificates of trademark registrations, and papers issued from the Office shall be authenticated.

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