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quirement for a comprehensive oath, and section 131, a mandatory patentability.
Now, as I understand it, the mandatory citation of published prior art was proposed by the Patent Office back in 1963, and when you were Commissioner in 1969, the Patent Office proposed a rule that required submission of all prior art specifically considered in preparing the application and of a patentability brief containing arguments explaining why the claims were deemed patentable over the art identified.
Both of those rules were opposed, I am told, by the patent bar, and to the best of my knowledge they have never been implemented by the Patent Office. And in October 1969, in the APLA bulletin, you were quoted, “The response we had to the publication of the proposed rule has been mostly negative. The patent bar is resisting change.”
Can you tell my why rules such as those, which in the judgment of the Patent Office reflected progress, were not adopted?
Mr. SCHUYLER. I do not remember the 1963 proposed rulemaking. I was—about that time or shortly after that I was a member of the Patent Advisory Committee of the Department of Commerce. There was a proposal which I at that time--now, speaking individually still, Mr. Chairman-at that time supported that there be a mandatory requirement for at least a citation of the best art known to the applicant.
Some patent examiners were polled, and they said that it would not help them. I had difficulty understanding that at that time and still do, but that was one reason I believe that the Patent Office at that time did not implement the rule if it reached the point of a proposed rule.
For many years a large number of applicants have been submitting the prior art that was known to them to the examiner; and I guess the examiners, based on that experience, said it was not helping them. I am not going to try to explain that statement, but that is what was stated to me in the mid-1960's.
In 1969 the section of patent, trademark, and copyright law favored a patentability brief provided there were certain safeguards that protected the applicant and his attorney from a charge of fraud in the event that there was some inadvertent omission on it. I do not believe that position was ever taken to the House of Delegates, so I cannot explain it as a position of the American Bar Association. But based on the attitude of the lawyers who were present at that meeting-and it occurred in Dallas, and I was there; I proposed a rule again—I did not, as I recall, make a decision not to implement the rule. I believe we were still studying it. There was some negative reaction at the hearings that we held, but—I may be mistaken. This is entirely recollection, and I could review files and give a definite answer. But my recollection is that I did not withdraw that from the procedure; that it was still pending when I resigned. I would personally still support it.
Senator Hart. As everybody in this room knows, I would not recognize a patent if I fell over it. But those recommendations that you are talking about, citation of the prior art in the patentability
brief--as an outsider, it makes eminently good sense that I find it difficult to stop pushing you to see who in God's name really thinks
it is crazy.
You say in 1963, the examiners thought it would not be helpful? Mr. SCHUYLER. I was told that, Mr. Chairman.
Senator HART. But in 1973, the Journal of the Patent Office Society in an editoral supported the patentability brief. The Journal, as I understand it, reflects the examiners' views.
You say you have not decided, and it is subject to correction for the record, if on further thought you discover that your memory is bad. Is the decision to implement those rules the Commissioner's decision, or does he have to run it by the Secretary of Commerce? Clearly he runs it by the patent bar.
Mr. SCHUYLER. The decision, when I was there, was the Commissioner's decision. It had to be approved by the Assistant Secretary of Commerce for Science and Technology. I do not recall having anything like that disapproved which I had sent up. It did require that approval in order to be made part of the Patent Office rules.
But title 35 gives the Commissioner the power to establish rules of practice, and this is a change in the rule which could be implemented by the Commissioner. Of course, the Commissioner is subject to the Secretary of Commerce and that has been delegated to the Assistant Secretary for Science and Technology.
Senator HART. Mr. Brennan?
Mr. BRENNAN. Mr. Schuyler, I would like to follow the chairman's lead in asking you some questions relating to the Office of Patent Commissioner.
The prepared statement of the next witness contains a number of comments about individuals who have served as Commissioner of Patents. I would like to read excerpts from that statement and then invite your comments.
Mr. SCHUYLER. I have not seen the statement.
Mr. BRENNAN. I will read it. It is the statement of Edward S. Irons, the next witness.
The office of Patent Commissioner has long been a political plum awarded to patent lawyers in the service of business interests. The strategy of these Commissioners has been and is to join with the organized patent bar from which they came in importuning Congress to enact invalid legislation purporting to lower the constitutional patentability standard to the level to which the agency and the patent bar subscribe.
Would you care to comment on those statements ?
Mr. ScHUYLER. I have not engaged in any political activity. So I do not understand the matter of “political plum.” It cost me $100,000 after taxes to be in that office for the period I was there. If that is a political plum, I do not have a very good sense of values.
Mr. BRENNAN. Are you aware of any recent Commissioner who was appointed to that office following active political activity?
Mr. SCHUYLER. Not any recent Commissioner, not any Commissioner in the last half century.
Mr. BRENNAN. I would like to invite your comment on another statement of the next witness.
He indicates on page 10 of his prepared statement that under your administration of the Patent Office, the standard of patentability reached "a new low."
Would you care to comment on that?
Mr. SCHUYLER. I would refer Mr. Irons to the statistics of the Patent Office, which are the best measure that I have. The percentage of applications allowed has remained substantially unchanged. I have to assume that the cross-section of applications filed has remained substantially constant, I cannot imagine anything that is going to change that.
But if the standard has been lowered, I would think a larger percentage of applications would be allowed. While I was there, I watched that and it remained about 70 percent, as I recall, of all applications were allowed. And that did not change materially while I was in office.
Mr. BRENNAN. Thank you.
On another subject, and again from your personal knowledge if you had a choice between a fee schedule where you had an issue fee in the range of $200 to $300, as opposed to establishing maintenance fees, what would be your personal preference?
Mr. SCHUYLER. I do not find an issue fee of $200 or $300 shocking, particularly in today's economy. And I think that having the money now and knowing that you are going to get it and spreading it among 80,000 patentees a year instead of guessing how much you are going to get in the future, it would be better to have the issue fee originally.
Mr. BRENNAN. Thank you.
Senator HARt. Mr. Schuyler, thank you very much for your testimony.
Mr. ScHUYLER. Thank you very much. It is a pleasure to be here. Mr. BRENNAN. Mr. Edward S. Irons.
Mr. Hart. Mr. Irons, a portion of your testimony has already been given. I must confess I have not read any of it.
I encourage you to respond in any fashion that you would like.
Mr. BRENNAN. Mr. Irons, do you wish to have your entire statement printed at this point in full in the record ?
Mr. IRONS. Yes, Mr. Brennan.
STATEMENT OF EDWARD S. IRONS, LAWYER, WASHINGTON, D.C. Honorable Chairman and members of the Subcommittee, I am pleased to appear at this hearing to testify with respect to S. 1321. In this statement I have attempted to provide certain fundamental background information which is deemed essential to a proper understanding of the issues raised by the specific provisions of S. 1321 with which this hearing is particularly concerned.
Emphasizing the constitutionally mandated paramount public interest, the Supreme Court has repeatedly admonished for 150 years that it is not a "primary purpose of the patent system to create private fortunes for the owners of patents”.? Nevertheless, owners of patent monopolies have relentlessly continued to pressure the Patent Office, the courts and, most of all, the
1 Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917). See e.g., Pennock v. Dialogue, 27 U.S. 327 (1829); Kendall v. Winsor, 62 U.S. 322 (1859), Lear, Inc. v. John 8. Adkins, 395 U.S. 653 (1969); Blonder-Tongue Labora. tories, Inc. v. University of Minois Foundation, 402 U.S. 313 (1917); Deepsouth Packing Co., Inc. v. The Laitram Co., 406 U.S. 518 (1972).
Congress to invert this order of priorities to render the patent system a tool of private investors. It is said that patents must be awarded for participation in all research and development, even of the most pedestrian type, in order to foster investment in further research and development. It is darkly predicted that if patents are issued, as the Constitution requires, solely as a stimulus to high quality technological advancement, business will not invest in the work needed to convert inventions into marketable products or, in economists' parlance, “innovations”.
To date only the Patent Office has capitulated.' In defiance of constitutional and statutory restraints as explicated by the Supreme Court, the Patent Office has not only continued its operational policies unchanged but has joined forces with the patent owners on all fronts.
In implementation of this false philosophy, the Patent Office churns out tens of thousands of patents annually granting monopolies to private interests in trivial "inventions” often representing no advancement in technology at all.“
The small percentage of these patents which cover technology that finds wide commercial acceptance virtually all encounter litigation in the courtsand of those, one quarter or less survive as actually comporting with the statutory and constitutional requisites of a valid patent. This high incidence of invalid patents among those of true commercial significance is symptomatic of a deep conceptual and philosophical division between the Patent Office and the courts as to the correct function of the patent system in contemporary society.
This division can be traced to at least two major defects in the patent granting process. The antiquated procedural handling of patent applications has not changed substantially since 1836. In addition, the false philosophy that private business interests are paramount dominates the Patent Office even as it also dominates the Department of Commerce of which the Patent Office is now a part.
S. 1321 is an informed major effort toward both modernization of Patent Office procedural machinery to put it on a par with that of other government administrative agencies and revision of Patent Office philosophy outlook to insure that private patent monopolies clearly satisfy all constitutional and statutory prerequisites.
S. 1321 is a refreshing and much needed departure from S. 643 of the 92nd Congress and anticipated patent "reform" bills soon to be introduced in this Congress which, like the 1952 Act, were essentially written by the
2 With the exception, in the congressional context of the enactment of the apparently unconstitutional Public Law 91-577 which authorizes the grant of private patent monopolies for merely norel sexual reproduced plants and in the jndicial context, of certain pronouncements by the United States Court of Customs and Patent Appeals. now preponderantly composed of ex-patent lawyer judges. Note the reversal of the Court of Customs and Patent Appeals decisions by the Supreme Court in Brenner r. Manson, 383 U.S. 519 (1966), and Gottschalk v. Benson, U.S. - 34 L. Ed. 2d 273 (1972).
[T]he bulk of (patent lawyers') services to clients consists of helping them obtain and defend the validity of patents. Quite naturally then they tend to identify the good wtih more patents rather than fewer. just as does the Patent Office for å different but parallel set of
Thus the Patent Office and the patent bar comprise a powerful, 'pro-patent' pressure group.
"Because no group of lawyers and no government agency specializes in fighting against patents, and no particular segment of the business community is uniformly harmed by patents, there is no 'antipatent' pressure group... M. Shapiro. "The Supreme Court and Administrative Agencies", The Free Press, N.Y., 1968. p. 206.
1 "It is now a truism among patent lawyers that if you sit around the Patent Office long enough, and change your claims often enough, rou will eventually get some kind of a patent on almost anything': M. Shapiro. “The Supreme Court and Administrative Agencies", The Free Press, N.Y., 1968, p. 189.
"In fact, very few of the seventy thousand patents granted each year actually constitute genuinely novel and significant inventions. The vast bulk represent minor changes in the current art, fanciful gimmicks. molecular modifications, even plagarized versions of other patents", Green, "The Monopoly Makers", Grossman Publishers, N.Y., 1973. P. 305.
5 "The Act of 1836 established the pattern for our present system by providing statutory criteria for the issuance of patents and requiring the Patent Office to examine application for conformity therewith ... no basic changes have been made in its general character in the succeeding one hundred and thirty years", 1966 Report of the President's Commission on the Patent System. p. 1.
It is common knowledge that the American Patent Law Association plans to sponsor a patent law revision bill. The administration is known to be considering a bill which presumably will represent an unacceptable compromise between the views of the Department of Justice and the views of the Department of Commerce, the latter synthesized in turn from views of the Patent Office and those of the business groups (including the organized patent bar) to which Commerce is subservient.
patent bar in liaison with the Patent Office to accomplish by legislation enacted by an uninformed Congress? what this same pressure group has always failed to accomplish in the courts.
II, PROCEDURAL OBSOLESCENCE
In 1836 when the present examination process was instituted, it was natural and reasonable to provide for only an ex parte exchange between applicant and Patent Office with the evidence to be examined confined to that available in files of published material maintained by the Patent Office and that voluntarily supplied by the applicant. Means of communication and travel were then such that any thought of a more searching factual inquiry involving outside evidence and public participation would have been totally infeasible. During the ensuing 140 years, techniques for communication, travel and for the gathering and evaluation of evidence have advanced markedly. The federal government in establishing a plethora of other administrative agencies has taken full advantage of these advances to provide in almost every case for public inter partes adversary proceedings in which interested members of the public have a fair opportunity to be heard. In contrast, the Patent Office stagnated-largely because it was and is in the interests of the business community for it to do so—and society is penalized by a flood of illegitimate private patent monopolies resulting from secret ex parte, proceedings before an agency which unconstitutionally subordinates the public interest to private gain.
Every federal agency except the Patent Office that is charged with the duty of adjudicating applications for special licenses of franchises 8 has, by rule or statute or both, subpoena power to compel relevant testimony and document submission, a duty to provide for public hearings and to permit public participation in the submission of relevant evidence and a responsibility to sift all relevant evidence that may be submitted from any source.
The Patent Office, by contrast, has no public hearings and affords no opportunity for public participation in its adjudicatory process. It lacks even the power to compel patent applicants to disgorge all relevant facts of which they may be possessed. Its proceedings are secret. It has resolutely refused-the Freedom of Information Act notwithstanding—to make even its final decisions in the adjudication of cases publicly available. Its examiners are treated as part of an assembly line team whose product is patents—and the emphasis is not on the quality of the product but on quantity, with progressive imposition of quotas demanding the generation of more and more patents in less and less time.
The result is that nowhere else in our government are franchises so lightly granted or so little respected. The reason is obvious. Within the
But in a very real sense the Patent Office wrote the congressional statute of 1952 as part of its continued battle with the Supreme Court.
"It had help. The American patent bar is a relatively well-organized group com. prehending most of the lawyers who specialize in patent matters, formed into regional associations with a national coordinating hierarchy. As soon as patent law revision was in the wind, this group created a task force of its most prominent leaders to help shape the legislation. This task force became so active in the statute drafting that in the end Mr. Federico (a leading member of the Patent Office bureaucracy) did not so much draft legislation for a congressional committee as with the patent bar. Not only did he and three lawyers officially representing the organized patent bar do almost all of the drafting, but the drafts were circulated among all prominent patent lawyers and revised to conform to their desires. (Emphasis in original.]
"In any event the propatent forces had a free hand in writing the (1952) legislation unopposed by any countervailing group. Of course the congressman on the subcommittee, and then those on the full Judiciary Committee, all of them lawyers, but none particularly expert on patent matters, did review the draft. But they made few changes, and the Committee's report and ‘Revisor's Notes,' which accompanied and explained the bill, were written by Federico, either independently or in cooperation with the representatives of the patent bar. One of those representatives has proudly answered the question : 'Who wrote the patent laws of 1952? We did.'" M. Shapiro, "The Supreme Court and Administrative Agencies”, The Free Press, N.Y., 1968, pp. 205–206, 207; emphasis added.
s • The patent is a privilege ... conditioned by a public purpose. . .'" BlonderTongue Laboratories, Inc. v. University of Illinois Foundation, 202 U.S.' 313, 344 (1971), quoting Mercoid v. Mid-Continent Investment Co., 302 U.S. 661, 666 (1944).
Irons v. Schuyler, 465 F. 2d 608 (D.C. Cir. 1972). The paragraph of the affidavit of Patent Office Solicitor Martin quoted in the court's opinion was later shown to be factually inaccurate.