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evidence of the state of the art which the applicant has considered in connection with such application for patent, the disclosure of which is necessary to make the application as a whole not misleading; and (2) an explanation as to why the claims in such application are patentable over such matter."

Sec. 140 would provide that “In all proceedings in the Patent Office, the applicant shall have the burden of persuading the Office that a claim is

patentable.” The following Sections would, in my opinion, also confer excessive authority on the Commissioner and other Officials of the Patent Office:

Sec. 3(a) would confer upon the Commissioner the authority to "define any and all terms used in this title in connection" with proceedings before the Patent Office.

Secs. 23 and 24 would confer upon the Primary Examiner and the Public Counsel the authority to issue subpenas. In addition, there are several provisions which I also consider objectionable for various reasons :

Sec. 122(a) would provide for the publication of pending and abandoned applications.

Sec. 153(b) would reduce the term of patents to twelve years from the actual filing date in the United States or if priority is claimed on the basis of a corresponding foreign application from the filing date of the foreign application.

Secs. 191 and 192 would provide for deferment of examination unless such examination is requested within five years of the effective filing fate of the application. Such examination may be requested not only by the applicant but by any other person at the expense of the applicant except for the base examination fee. If the request is made by the Public Counsel or the United States, even this exception does not apply.

Sec. 263 would provide that no assignment by an employee to his employer of an invention made in the course of his employment shall be valid unless the employee receives in addition to his regular salary a minimum of 2 per cent of the profit or savings made by the employer.

Sec. 4(a) of the Transitional and Supplementary Provisions provides that the Act shall apply not only to applications filed on or after its effective date but also to applications filed but not allowed before the effective date of the act. Sincerely Yours,



Chicago, Ill., September 18, 1973. Re: S-1321 Mr. THOMAS BRENNAN, Old Senate Office Building, Washington, D.C.

DEAR MR. BRENNAN : It is our understanding that the Senate Subcommittee hearings on the Patent System, which commenced on September 11, 1973, were limited to five proposed legislative changes in the patent laws, and we welcome the opportunity to comment on these five proposed changes which we understand are:

1. Modification of patent examination proceedings to provide public adversary hea rings;

2. the creation of the Office of Public Counsel;

3. establishment of a system for deferred examination of patent applications;

4. revision of the patent fee schedule, including the establishment of maintenance fees; and

5. administrative restructuring of the Patent Office, including the pró

posed establishment of the Patent Office as an independent agency. 1. Modification of Patent Examination Proceedings to Provide Public Adver

sary Hearings Based upon our long experience with public adversary proceedings in Germany and Japan, our Association believes that our system vould not be strengthened but would be weakened by such adversary proceedings. In those countries we have found that many interested parties automatically file oppositions to the issuance of any patent in the particular area of their endeavor. Some few of such oppositions have merit but most of them are merely to harass and prevent the patent applicant from obtaining a patent. It is not uncommon in Germany, for example, for opposition proceedings to run the entire term of the panett. We believe such proceedings are unnecessary and undesirable in our Patent System. It is felt that the prior proposal by Senator McClellan for reexamination after issue, Section 191 of S. 643 would help improve the quality of patents without the undesirable and lengthy adversary proceedings such as exist in the German and Japanese patent laws. Note that the proposed European Patent (of which Germany will be a member) incorporates a similar arrangement for opposition or reexamination after grant. 2. The Creation of the Office of Public Counsel

Our Association approves in principle actions to improve the system of Patent Office examination and the quality of issued patents. However, it should be remembered that under our present system the Commissioner of Patents and his corps of Examiners, as well as the Board of Appeals, are in effect Public Counsel. The establishment of an office which could or would reexamine each application would not improve the system. The Public Counsel would become another tier in the examination process, and merely make it more cumbersome. The grant of subpoena power to Public Counsel to intervene in Patent Office examination procedures would unduly extensively delay the examination procedures, and greatly increase the cost to an inventor of obtaining a patent.

It is believed that the most beneficial step to improve the quality of patents would be to upgrade the quality and number of Patent Office Examiners, and to improve the techniques for searching of the prior rights. 3. Establishment of a System for Deferred Examination of Patent Applications

We are opposed to deferred examination in principle unless and until there is some viable reason for it. It would appear better to target in on a goal of examining and issuing U.S. patents within 18 months of application rather than going to a system such as is utilized in Germany, Holland, Japan and Australia. The reason for these aforementioned countries going to a deferred examination system was that they were in a hopeless situation with regard to their backlog. Such a backlog does not exist in the U.S. Patent Office. 4. Revision of the Patent Fee Schedule, Including the Establishment of Main

tenance Fees Our Association believes that the present method of setting fees for Patent Office Services, i.e., by Congress, is better than any of the proposed revisions suggested thus far. Our Association is opposed to maintenance fees. 5. Administrative Restructuring of the Patent Office, Including the Proposed

Establishment of the Patent Office as an Independent Agency Our Association supports the proposal that would establish the Patent Office as an Independent Agency. Sincerely yours,




Cleveland, Ohio, September 25, 1973. Re: Written Statement of the Position on Selected Portions of the Patent

Reform Act of 1973 (S. 1321).
Chairman, Subcommittee on Patents,

Trademarks and Copyrights,
U.S. Senate,
Senate Office Building,
Washington, D.C.

DEAR SENATOR MCCLELLAN: This letter is written on behalf of the Board of Directors of the Cleveland Patent Law Association to advance comments concerning State Bill 1321, 93d. Congress, 1st Session. The Cleveland Patent Law Association has a membership of about 250 patent attorneys from Northeastern Ohio who represent a cross section of patentees from individual inventors to large corporations.

Since the Subcommittee will be receiving many comments concerning the bili as a whole, the Board would like to concentrate its remarks on certain features of the bill which it believes are anti-competitive in that they favor entrenched oligopolists and which introduce excessive patent costs into the system.

Senate Bill 1321 provides for re-examination proceedings of an application before issuance. Re-examination proceedings are often used anti-competitively by those entrenched in the market place to frustrate new competitors who have made an invention and need a patent to gain a foothold in the market. This is true when the system encourages :

(a) Delaying the issuance or enforcement of a legitimate patent by instituting re-examination proceedings.

(b) Taking specious appeals during the re-examination proceedings.

(C) Imposing heavy financial burdens on new competition unable to carry the burden. Such tactics are particularly harmful to the small businessman and in areas of fast moving technology.

Re-examination before issuance of the patent is susceptible of use as an anti-competitive tool particularly if the patent term is measured from the filing date of the application. Moreover, such a system requires the compulsory publication of pending patent applications. This poses an additional financial burden on the Patent Office, whose publication costs now run approximately 40% of the budget. It also fills the Examiner's search files with many redundant disclosures increasing not only the cost of classifying and maintaining the search files, but also the time of the Examiner to make a search.

Accordingly, the Board favors re-examination only after issuance of the patent and without the right of the person instituting the re-examination to participate as a party in the proceedings. Re-examination after issuance will not make it possible to delay the patent of the legitimate patentee and will enable him to recover damages for infringement after issuance. The person instituting the re-examination proceedings should not have the right to participate as a party so that the proceedings cannot be used anti-competitively to unduly delay enforcement of the patent.

Public Counsel may be given the right to participate in the post-issuance reexamination, thus protecting the public interest. The Board opposes any Public Counsel who has the duty to select applications prior to issuance for purposes of re-examination. The task of screening applications to select those which should be re-examined would not only be a Herculean (and expensive) task but also raises constitutional law questions and delays the issuance of legitimate patents. The latter is detrimental to the public if the patent term is measured from issuance and detrimental to the legitimate patentee if it is measured from filing.

Without addressing ourselves to the desirability of modest maintenance fees, we do believe that the maintenance fees proposed by Senate Bill 1321 are excessive in magnitude, would work contrary to the purposes of the patent system, and would be particularly harmful to the small businessman. Here again the fees would become anti-competitive in an oligopolistic market.

We favor proposed bills providing voluntary defensive publication of an application by an applicant who is only interested in preserving a right to an interference.

From the foregoing you can see that we, in this letter, specifically oppose Sections 3(d), 41(c), 122, and 135 of S. 1321.

While these considerations are being advanced at this time, representatives of the Cleveland Patent Law Association would welcome further opportunity to meet with the staff and discuss in depth the above considerations and other proposals of the bill.

Also enclosed is a letter which was received from Merton H. Douthitt, Patent Counsel for SCM Corporation, Glidden-Durkee Division, and directed toward many of the points of the bill on which we as Directors of the Cleveland Patent Law Association have not taken a formal position. Mr. Douthitt is now President-Elect of the Cleveland Patent Law Association.

Very truly yours,


President, Cleveland Patent Law Association.


Cleveland, Ohio, September 21, 1973.
Re Hart bill.
Yount, Tarolli & Weinshenker,
Cleveland, Ohio

DEAR HERMAN: In addition to the sections ou commented on, the twelveyear period for a patent monopoly measured from filing, the stiff proposed maintenance fees to arise promptly, and the employed inventor royalty section give me substantial concern.

In my personal experience, certain inventions which were looked upon as marginal but later blossomed into quite useful developments most likely never would have been filed on if short-term and/or high maintenance fees had been actualities. At least one other type of invention, a scientific breakthrough as of its time, also never would see the light of day under such proposed circumstances. A third type of invention which I have encountered from time to time is marginal because of being outside of the field in which the inventor (and often his backer) are working and familiar with. These also could be neglected and remain unpublished in the face of these proposed law features. A fourth type of invention that comes to mind, where the proposed short coverage period and prompt heavy taxation can be highly discouraging to their patenting, is an invention involving a pesticide, food material, or other substance requiring F & DA approval. Such approvals are normally quite protracted.

I have had personal experience in each one of the situations and can cite examples. My testimony is essentially as follows:

(a) The demand for isoparaffin alkylation to make 100-octane gasoline receded in the late 1940's to the extent that investment in improvement patents in this art became marginal for some years. By the late 1950's revival of this art occurred as automobile engines demanded higher octane fuels. As it actually happened, a variety of what for a time were considered marginal improvement inventions had been published. These were available for licensing, studying, teaching, and avoidance when the second flurry of activity occurred, instead of remaining proprietary and secret where they might have been neglected, re-researched, or generally unavailable.

(b) The invention represented by U.S. Patent 3,278,623 (issued October 11, 1966 on a filing of February 19, 1964) is an example of the scientific breakthrough invention type I spoke of above. It is a catalytic conversion process for changing the relatively abundant alphapinene (of restricted usefulness) into beta-pinene (a much more reactive material useful for making adhesives and many other materials). Alpha and beta-pinene are found in southeastern turpentine. Alpha-pinene, but little or no beta, is a prominent constituent of most of the rest of the world's turpentines.

A short production run on this invention about 1966 showed that the best inventive catalysts for this conversion are poisoned by even minute amounts of sulfur compounds prevalent in the feed (made from sulfate turpentine). The patent application matured reasonably rapidly into a patent (two years and eight months). At the time of filing in 1964, it was estimated that a truly economical feed desulfurization process would be available in the foreseeable future. Two further inventions later, and over nine years later, two other inventors made two further inventions which together constituted what appears to be a fairly economical feed desulfurization scheme, thus making the original breakthrough invention a component of a probably practical package. Had the inventor's corporate sponser been faced with a mere twelve-year patent life from 1964 and/or substantial maintenance fees arising fairly promptly, this sponsor most certainly would have elected to keep the basic process secret. As it happened erentually, the sponsor elected to abandon at least one of the foreign counterparts of the basic case in view of mounting taxes.

(c) My Company has invested substantial research funds in the ultravi. olet curing (drying of paints for industrial coatings), occasionally, an unexpected experimental observation of an alert research man leads to an invention possibly useful in the making of an ink, a business which the Company is not in and which is significiantly different from paints and protective coatings. A problem arises : should such an invention be filed on and patented fairly speculatively for what it may be worth, or should it be tucked away without development as merely an interesting digression from the main line of work. A short paetnt life and high taxes certainly would do nothing at all to stimulate the patenting and disclosure of such invention in the collateral and unfamiliar field where the Company neither operates nor had intended to investigate.

(d) Inventions made personnel of My Company in 1968 and 1969 in the pesticide field are still being field tested today. The patent applications, based on favorable screening test are subject to option agreements in case they work out well. In two to five more years from now we should know whether the optionees think they have a competitive commercial item, are willing to undertake the cost of registration of them, then will pay us 5% royalty on sales if patents are secured. Unpatented technology here will bring us very little if any revenue and then only if no unlicensed competitors appear. Most of the twelve-years of proposed patent protection will

have been washed out before a sale is made. An interesting related problem in connection with the inventions cited in (b), above, is how to award these inventors the 2% royalty of profit or savings called for in the present bill. The ultimate practicality of the breakthrough basic process, still regarded as an unusual thermodynamic anomaly, depends upon the other two inventions relating to feed desulfurizing. One of these other two is an ingenious scheme of multiple distillations to cut out sulfur bearing components cheaply and grossly, but not completely. The other takes the semi-refined product of the process and puts it into substantially finished useful condition, but itself would be too expensive if one had to operate on feed not so pretreated.

The three inventors above during this development time were paid in salary and fringe benefits at least $750,000. Admittedly more than half of their time was on other assorted projects in this ten years. Laboratory and pilot plant facilities were supplied, along with the time and support of chemists, engineers, analysts and technicians. It is highly unlikely that such an expensive and protracted research and development program would have been started, let alone maintained, on such a speculative project had only a few years of exclusivity been available, particularly with the added reduction to possible profit represented by royalties payable to three inventors. It would be much cheaper to have some third party invent and develop such process, then license it at 6% royalty based on sales for the few years of patent life. Such royalty is fairly high in the chemicals business and is easily measured by accountants; profits and savings are far more intricate measurements; and allocation of credit for the ultimate marketability of an invention is truly a bucket of worms.

Industrial situations like this are not usual. I would foresee the net longterm effect of the proposal for specialty ascertained royalty compensation to employees who are hired to invent to be diminution in the number of such employees, their supporting facilities and supporting staff maintained. I sincerely question whether the progress of science and the useful arts is promoted rather than retarded by such a feature.

I encounter from time to time genuine disputes about inventorship or co-inventorship within a particular laboratory. I encourage laboratory personnel to talk with each other freely and get aid, assistance, and inspiration, as well as criticism, from their co-workers on various projects. Would secrecy and/or acrimony tend to develop between co-workers from a special royalty stimulation attach to the lucky winner? I think there is a substantial possibility.

All of these inventors owe some part of their success to the analytical chemists and other toilers who have devised and routinely turn out analytical results and ingenious solutions to daily tasks so that their inventors get clues initially and know where they are going subsequently. Perhaps the analyst should be compensated specially because of his lack of opportunity to make profitable inventions. I can't favor much "bootlegging' of analytical chemists' time in the direction of more glamorous projects, let alone endorse a provision which would tend to enhance it. Sincerely,


Patent Counsel.

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