aluminum foil from the manufacturer as a requisite to use of the patented cap making. If this were made possible, the aluminum-foil manufacturer could prevent the use of other aluminum foil by the cap maker and obtain in effect a monoply on foil for that use, although a patent could not be had on the aluminum foil. Given enough use patents to acquire a large aluminum-foil volume, the aluminum-foil manufacturer could secure a monopoly in the manufacture of such foil as though he had a patent on it, since his patent-assured volume would sustain his unassured volume (not protected by patented use) to enable him to undersell his competitor in such markets to virtually obtain a complete monopoly. The bill in its present form is intended to prevent this practice (Carbice doctrine) but with the "especially made or adapted for use" provisions, seems to provide a way for such practices to be legally restored, for the foil, as used in the patented way may be required to be of a special thickness or size to be handled by the machine not particularly required in that form elsewhere or it may be specially coated or carry imprint of customer indentification such that in that form its use in a patented machine would be marked.

It is my opinion that the real difficulty in defining contributory infringement resides in the way in which one can express what is to be understood as coming within the meaning of especially made and adapted for use in infringement of a patent and which will not grant more to the patentee than that to which he is justly entitled and which will not encourage abuses which through public resentment will bring damaging attacks upon our patent system.

It should not be possible for any interpretation to be placed on such a definition that would give to a patentee the right to embrace within his monopoly all or any of the elements or materials-old, unpatented, or patented-which become "especially made or adapted for use" by virtue of a choice or demand made by one practicing the patent. If the character of the thing used is determined by the one who practices or promotes the practice of the patent and not by virtue of the patentee through his patent teachings and from which novelty can be ascribed to it so that, as such, it becomes a requisite to the proper assembly or operation of the patent, I do not believe it should be as an element per se, a patentee's right to embrace it within his patent monopoly. If we adhere to defining elemtnts such as the phonograph record of the Leeds v. Catlin case, we shall be setting proper limits for those things which can be said to be "especially made, etc."

Without some limits to "especially made," enactment of such a bill into law would serve as a great incentive for groups of individuals or manufacturers to adopt and cause to be suplied to the public patented products not of themselves of great merit over unpatented products except that these things would be protected by patent whereby monopolies of one kind or another could be set up. As an inventor who has had many patents issued and is familiar with many patents issued to others, I can point out that one with knowledge of the art and a resourceful mind can readily patent many inconsequential arrangements upon which patents can nevertheless be obtained for such exploitation even though they may not represent a great advance in the art.

There is one other aspect to this objection to including "elements," not properly defined, within the patentee's patent monopoly. This is with reference to the public's rights.

In many instances, the "element" of a combination patent which a patentee may charge when sold, as contributing to infringement is, per se, patented by another. As long as the element, per se, remains patented, both patentees may deal with one another on a mutually agreed basis. The exclusive rights granted to a patentee expire after 17 years and thereafter it becomes the property of all the people. Assuming that the combination patent was granted at a later date, both the patentee on the element, per se, as well as the public, may lose their rights in the element, per se, when the patent thereon expires. The patentee of the combination may thus assume a monopoly on a thing upon which a patent has expired. The patentee on the element, per se, who had to be respected by the other as long as his patent existed, may be forced to pay tribute after his patent expires. The public may well be obliged to pay more for an item upon which, per se, a patent has expired than they were obliged to pay before, for competition may well be lessened if not removed.

I believe that we should also give consideration to the effect of a definition of contributory infringement upon the replacement of parts in a patented combination. Would the definition wipe out the present rule that an expendable element in a patented combination may be replaced without infringement? It

is conceivable that if it did, it would become highly profitable for some companies to accept recognition, or a pool, of certain patents as a means of becoming the sole source for parts in the repair of their products. What this could mean in cost to the public and the effect upon competitive parts makers today is not difficult to imagine. One need not look further beyond the automotive field, radio, and home-appliance goods, to realize the possibilities and the effect of dealing only with designated suppliers.

I have tried to point out possible effects of the proposed bill based upon personal knowledge and experience with the patent system. In 1913 I applied for my first patent, and since that time more than 125 patents have carried my name. More than 80 of these have not expired, and I still have pending applications and new inventions on the way. The greater majority of my inventions have attained commercial use, and I have been further associated not only with their development, but with the manufacture, exploitation and sale of my inventions as chief engineer and chairman of the board of the Mercoid Corp., Chicago, Ill. I have also had experience with patent litigation on numerous occasions during the past 25 years.

The Mercoid Corp.'s business is based on patents, the rights thereunder being obtained by license with others and myself. As an individual, I have never chosen nor deemed it necessary to file suit for infringement of any of my patents, except in one instance on a joint invention many years ago in which case the defendant agreed to cease the infringement. The Mercoid Corp., however, has not escaped suits for infringement and is fully conscious of the varied attempts to utilize patents to control the sale of various commodities. The corporation's successful defense of such suits has not been limited to the principle upon which the United States Supreme Court decided the recent Mercoid cases, but rather, in the other instances, on the ground of invalidity and noninfringement.

The late Judge Evans, United States Circuit Court of Appeals, Seventh Circuit, in his study of the disposition of patent cases by the courts shows a total of 462 opinions from October 1936 to May 1941. During that period more than 900,000 patents existed, including expiring and issued patents.

Of the patents in litigation, about three-fourths were held invalid or not infringed, so that it is good reason to conclude that the defendants' reasons for fighting infringement suits were not frivolous, and it is therefore to be expected that the outsome of such suits can be adverse to the patentee for the Patent Office when granting issue of the patent may not have available that information in the hands of people familiar with the art.

There were 81 cases held valid and infringed or less than 1 in 11,000 patents and assuming these to have been deliberate infringements, it can still be said that there is strong approval and respect for the inventor and his patent. There are more than 600,000 patents in force and nearly 150,000 pending applications with a rate of filing of patent applications greater than ever showing that we have a healthy and active group of inventive forces operating under our present system.

As much as it may be desirable on the part of some to have a statutory definition of contributory infringement, I view with much skepticism the attempts to so define it and with great_apprehension the results which may follow the enactment of the chosen worded bill. This patent system of ours, it would appear, seems to be functioning quite well, and nothing seems to have particularly stifled the inventive minds of the Nation either by virtue of a questionable degree of reward which a patentee may expect or by the method to which he may have to resort to exploit his patented invention.

Mr. MCCABE. I am sorry. I thought perhaps you might want to ask me more questions, because I am very sincere in trying to be of assistance in the sense of getting a good revision. I hope you will remove the objectional provisions in section 231 (b), (c), and (d) in

the bill.

Mr. BRYSON. Thank you very much.

Without objection the committee will resume its hearings at 2 o'clock.

(At 12: 10 p. m. a recess was taken until 2 p. m. of the same day.)

AFTERNOON SESSION

The committee reconvened at 2 p. m. at the expiration of the recess. Mr. BRYSON. Come to order, please.

Captain Robillard, will you come forward, please?

STATEMENT OF CAPT. GEORGE N. ROBILLARD, UNITED STATES NAVY, APPEARING FOR THE DEPARTMENT OF DEFENSE

Captain ROBILLARD. Mr. Chairman, I only want to take about a half minute. Yesterday I discussed the eight suggestions the Department of Defense had to make, but I failed to note in the record that we otherwise approve the bill.

Mr. BRYSON. Thank you so much. When you say "we" whom do you mean?

Captain ROBILLARD. The Department of Defense approves the bill. Mr. BRYSON. You speak for all three of the branches?

Captain ROBILLARD. I am representing the Department of Defense-the Army, Navy, and Air Force.

Mr. BRYSON. We are glad to see that they finally are coordinating. Captain ROBILLARD. It happens occasionally.

Mr. BRYSON. Mr. Rich, we spoke to you informally before the noon hour. Will you come forward, please, and identify yourself for the record? Give your name and in what capacity you appear.

STATEMENT OF GILES S. RICH, ESQ., NEW YORK, N. Y.

Mr. RICH. Mr. Chairman, my name is Giles S. Rich and I am from New York. I am a practicing patent lawyer and have been in practice for 21 years. I appear here as a member of the advisory committee of the Coordinating Committee of which Mr. Ashton spoke in his testimony.

As you will recall he also stated that I am and have been a member of the drafting committee which assisted in the preparation of the suggestions which the Coordinating Committee submitted to the counsel for your committee.

Mr. BRYSON. Do you have a prepared statement?

Mr. RICH. I do not have any prepared statement.

Mr. BRYSON. All right, sir; you may proceed.

Mr. RICH. I have been asked to address my remarks to section 231, which is the infringement section of this bill. I should perhaps explain why I should be selected to deal with this particular part of the bill. I am, of course, very familiar, due to my activities on the Coordinating Committee, with the very great amount of work which has gone into the entire bill on the part of the committee counsel and the Coordinating Committee and all of the associations which worked independently and sent the fruits of their labors to the Coordinating Committee.

I also know, of course, how the labors of the Coordinating Committee commenced on the basis of your committee print which was prepared after studies of all the legislative proposals of the past 25 years. The infringement section, however, has perhaps received even more consideration than any other part of the bill. As Mr. McCabe pointed

out to you this morning, much of section 231 is based upon two prior bills which were considered in two previous Congresses-H. R. 5988 of the Eightieth Congress and H. R. 3866 of the Eighty-first Congress. Those bills dealt specifically with a subject which your reporter has recorded in reporting the testimony of these hearings as contributory fringe.

Mr. BRYSON. With the fringe on top.

Mr. RICH. I can also recall having made a valiant effort to explain in previous hearings on one of those bills what the difference was between contributory infringement and contributory negligence. Somebody wanted to know who contributed to what. So perhaps I should state at the outset that wherever there is contributory infringement there is somewhere something called direct infringement, and to that direct infringement someone has contributed. It is a very different thing from a concept like contributory negligence. And it is an old doctrine that has been in the law for some eighty-odd years.

In 1897 in a well-known case, Thompson-Houston Electric v. Ohio Brass (80 Fed. 712), the then Judge Taft said of this doctrine:

If this healthful rule is not to apply to trespass upon patent property, then indeed the protection which is promised by the constitution and laws of the United States to inventors is a poor sham. Many of the most valuable patents are combinations of nonpatentable elements and the only effective mode of preventing infringement is by suits against those who, by furnishing the parts which distinguish the combination, make it possible for others to assemble and use the combination and who, by advertisement of the sale of such parts and otherwise, intentionally solicit and promote such invasions on the patentee's rights.

Now, Judge Taft was on very sound ground in making those

:statements.

Mr. BRYSON. That was Judge William H. Taft?

Mr. RICH. Who was subsequently President of the United States. Mr. BRYSON. Was he Chief Justice then?

Mr. RICH. At that time he was on the Circuit Court of Appeals, I believe of the Sixth Circuit.

Mr. BRYSON. We frequently hear his name, or the family name, mentioned here on Capitol Hill now.

Mr. RICH. Coming specifically to 231, which I have called the infringement section, it seems to me that this is a codification of the finest kind. It does not deal exclusively with contributory infringement, but with the whole subject of infringement which is a logical part of any codification of the patent laws. You will observe that it begins with section (a) in which infringement generally is for the first time set forth in any patent statute. The laws that we have now say nothing whatever on the subject of infringement. They simply create a right and leave it to the courts to enforce it. But section (a) deals specifically with the matter and says what shall be infringement. That, of course, is direct infringement, which is the making, using, or selling of the patented invention without permission.

Then if you go over to section 241, in the next subsection of this bill, you find it states what remedy the patentee shall have in case of infringement. So it is a very neat and logical arrangement.

Now, the origins of the rest of 231 are to be found in these two previous bills which I mentioned. And I will not go into great detail about them, because the hearings were published, and I persume it was because I testified at some length on both of those bills that I was

asked to deal with the subject here today. Paragraph (b), (c), and (d) can be compared with the old bills in this fashion: Paragraph (b) of H. R. 3760 comes from the first section of the old bills, which had no number, and provides that any person who shall actively induce infringement of a patent shall be liable as an infringer.

In the old bills section 2 was purely introductory, and then we had sections 3 and 4. Now, those sections have been very neatly combined by your own committee counsel into the single section (c) of the present bill. We previously had a positive statement coupled with negative statement looking at the opposite side of the situation, and your counsel felt that that was an unnecessary thing to do. You could just as well say what it was and be done with it. And it has turned out very nicely.

Section (d) comes from section 5 of the old bills and deals with a topic which has come to be known in the patent law as the misuse doctrine, and I will have something to say about that in a moment.

I would like to say why I think this is codification of the finest kind. We do have in the law the doctrine of contributory infringement at the moment. In the last case in the Supreme Court, by which some people think the doctrine was abolished, it was actually specifically recognized by the Court. Only they said they couldn't apply it.

On the other hand, we have the conflicting doctrine called the misuse doctrine, and we have to deal with both of them if we are to tackle the problem at all.

In the cases known as the Mercoid cases the doctrine was to a large extent upset and rendered obscure. In the course of testimony on these previous bills it became unquestionably clear that there was a great deal of disagreement about the state of the law. How much contributory infringement do we have? Do we have any? The very decisions out of which this confusion arose, the Mercoid cases, show that there is confusion because the Mercoid case was decided by a divided Court in a five to four opinion, and the Court managed to render five separate opinions. There was one majority opinion by Mr. Justice Douglas in which Justices Stone and Rutledge concurred. There was a separate concurring opinion by Justices Black and Murphy and there were three separate dissenting opinions, the first by Justices Roberts and Reed, the second by Justice Frankfurter, and the third by Justice Jackson.

That opinion itself left things in a rather confused state.

Now, it was not an easy task for even the experienced members of the patent bar to take this situation and try to clarify it and codify it because the courts had not laid down any clear-cut line. That is the problem with which we wrestled. What we have been trying to do all along is to pick a sensible line in accordance with public policy as it seems to exist today, and to make it as clear as we possibly can. And that I think we have done within the limits of the English language. You cannot deal with situations which are, of necessity, going to vary and make language so clear that it is beyond any interpreting at all. .That is what we have courts for.

But I think with all the work that has been done in the course of these 4 years since the introduction of the first bill on contributory infringement, that we have come up with a solution which suits practically everybody.