The positions are initally evolved by members of particular committees having particular jurisdiction. I believe there are some 40 or 50 committees. The position is published in a printed report about 2 weeks to a month before the annual meeting of the Association. When the section holds its annual meeting, the report of the committee is presented by the committee chairman to this meeting of the section, usually attended by 300 to 500 members. It is then debated as a resolution and a vote of the members present is taken. A majority vote of the members present is necessary to establish a position of the section, but any member of the American Bar Association is prohibited from testifying at a committee like this on a section position.

That section position is next presented to the house of delegates, which comprises about 300 members: and there are only two patent lawyers in the house of delegates. The majority vote of the house of delegates on a resolution is required before I can appear here and represent the American Bar Association in those positions.

The resolutions set forth in our statement have followed that process.

Senator HART. You cite a 1967 ABA resolution. Am I to understand that that is the last time that the ABA has in its house of delegates taken a position which enables you to come in?

Mr. SCHUYLER. Yes, sir. Unless the section takes a different position. And there again, to change the ABA position it must go back through the house of delegates. So the house of delegates' position remains the policy of the American Bar Association until it is changed.

Senator HART. We all have sensitivity about our own bills. It is not as great as people suspect. S. 1321 was not born in 1967. How do you come in and react to S. 1321?

Mr. SCHUYLER. Mr. Chairman, we are not here today either opposing or favoring S. 1321 in its entirety. The three points which are raised here are issues that have been before this subcommittee on previous occasions. They, in substance, appeared in the report of the President's commission not even for the first time there, but they did appear there; and the timing of the 1967 position are geared in the report of the President's commission.

The matter of adversary proceedings and deferred examination were rather important issues at that time. They were considered by the American Bar Association at that time, and there has been no change in the position of the Association since that time.

Senator HART. Turning to the items on which the ABA takes no position, one is whether the Patent Office should be made independent of the Department of Commerce. Would you be in a position as an individual not speaking for the association to react to that?

Mr. SCHUYLER. I have my personal views, Mr. Chairman. I would be glad, if they would be of any benefit, to express them. It must be clear that they are not the views of the American Bar Association. Senator HART. Having made that clear, the committee would be benefited by hearing them I am sure.

Mr. SCHUYLER. In my opinion the Patent Office should be an independent agency only if the Commissioner of Patents is at a suffi

ciently high level where his voice can be heard. I would think that a level 2 in the five-level executive scale would be a proper place for such an important office if it is an independent agency.

I do not believe from my experience that the presence of the Patent Office in the Department of Commerce results in any undue influence. No influence was exerted on me as Commissioner with respect to any application, and I did not exert any influence on any examiner with respect to any particular application. So the need to have it as an independent agency would not be supported by that

reason.

I think as a patent lawyer I would be very proud to have a Patent Office as an independent agency with a Commissioner having a high enough stature to be heard. If he is at a level 4, as provided here, I am afraid he would be a voice in the wilderness. And I would believe that it would be better if he remained in the Department of Commerce where the Secretary of Commerce could speak for the Patent Office.

If I may make one further statement along that line. I have opposed the present organization of the Department of Commerce since the time it was inaugurated. I believe about 1962 or 1963, with the Patent Office reporting to the Assistant Secretary for Science and Technology.

If the Patent Office remains in the Department of Commerce, I believe that it should be either itself elevated to the position comparable to Assistant Secretary, or it should report through some other branch that is business oriented and commerce oriented rather than science oriented.

The patent system serves the scientist, but it is really the business incentives that are so very important. Based on my experience before I was Commissioner, and during the time I was a Commissioner, speaking very personally, I believe that the Patent Office would have been better off if it had not been reporting to the Assistant Secretary for Science and Technology.

I believe that Senator McClellan has a bill pending that would make the Department of Commerce have an Assistant Secretary for Patents and Trademarks, and I would support that. I would likewise support a bill that created an independent agency if the Commissioner were at a high enough level like level 2.

Those are my personal views, Mr. Chairman.

Senator HART. If you had your druthers, would you go for an Assistant Secretary in the Department of Commerce or an independent agency at the adequate level?

Mr. SCHUYLER. I hesitate-I would like to think about it for a minute, Mr. Chairman, because no one has ever proposed a high enough level. If it were, I think I would support the independent agency, because I would be proud-I am proud to be part of the system, and I think that would increase its prestige.

Senator HART. One of the objectives that I think all of us seek is to raise the level of disclosure made to the Patent Office to eliminate those decisions that are bad because of a lack of information.

The bill that the subcommittee reported in 1971 and S. 1321, in an attempt to achieve this objective, contained a section 115, a re

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.

No further questions.

Senator HART. Mr. Schuyler, thank you very much for your testi

mony.

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.

Thank you.

[The prepared statement of Edward S. Irons follows:]

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.

I. INTRODUCTION

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 S. Adkins, 395 U.S. 653 (1969); Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1917); Deepsouth Packing Co., Inc. v. The Laitram Co., 406 U.S. 518 (1972).