Hon. JOSEPH W. MARTIN, Jr., APPENDIX DEPARTMENT OF THE NAVY, Speaker of the House of Representatives, Washington, D. C. MY DEAR MR. SPEAKER: There is transmitted herewith a draft of a proposed bill to amend the act entitled "An act to provide additional protection for owners of patents of the United States, and for other purposes," approved June 25, 1910, as amended, so as to protect the United States in certain patent suits. The purpose of the proposed bill is to amend existing law pertaining to claims against the Government for its use of patented inventions in order to eliminate the necessity for payment of compensation on certain claims which are entirely unmeritorious. Under existing law any defendant in a patent-infringement suit is entitled to present evidence to the effect that an invention purported to be covered by the patent has been patented or described in a printed publication prior to the time that the applicant claims to have made the invention; or that the invention was in public use for more than 1 year before application for a patent was made by a subsequent inventor. Such evidence constitutes a complete defense to the action and the patent applied for is invalid. Inasmuch as the act of June 25, 1910, permits suits against the Government and allows the Government to avail itself of any and all special defenses, the defenses mentioned heretofore are available to the Government in patent-infringement suits. Despite the safeguards mentioned above, there are numerous cases wherein the Government is prevented from defending itself against claims which are without merit. In many instances inventions are made in Government departments and descriptions thereof are placed or recorded in official files but the inventions are not patented for various reasons. Large sums of money may have been expended by Government agencies in creating models and conducting tests leading to perfection of these inventions. In the War and Navy Departments many such inventions are made and perfected, the disclosure of which, by patent, would be adverse to the public interest from the standpoint of national security. Subsequently some inventor who, by unknown means, has obtained information regarding an invention, or who has perfected the invention independently and in good faith, may obtain a patent for his invention which is a duplicate of an existing Government invention. He then brings suit against the Government for its use of his invention. Under existing law, even though the Government may have known of the invention or was using it before it was devised or perfected by the patentee, compensation for the patentee is required because the Government is not permitted to show that the same invention has been previously disclosed by a Government employee or that it has been used in the public interest by the Government. Enactment of the proposed legislation would not have the effect of invalidating a patent in infringement suits, but it would permit the Government to raise a valid defense against an unmeritorious claim for monetary compensation in such suits when it can show that an invention by a Government employee is recorded in the official files of a Government department or agency prior to the invention or discovery of the applicant for the patent, or more than 1 year prior to the filing of the patentee's application for a patent on an invention which has been disclosed to, and in many cases used by, the Government for the benefit of the public. In view of the foregoing, the Navy Department recommends enactment of the proposed legislation. This bill, if enacted into law, would result in no additional cost to the Government. The Navy Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to the Congress. Sincerely yours, JOHN L. SULLIVAN, Acting Secretary of the Navy. Hon. EARL C. MICHENER, DEPARTMENT OF JUSTICE, Washington, D. C., February 24, 1948. Chairman, Committee on the Judiciary, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in response to your request for the views of this Department relative to the bill (H. R. 3929) to amend the act entitled "An act to provide additional protection for owners of patents of the United States, and for other purposes," approved June 25, 1910, as amended, so as to protect the United States in certain patent suits. The bill would amend the act of June 25, 1910 (36 Stat. 851, 35 U. S. C. 68), as amended, so as to provide that, as an additional defense available to the Government under such act, "any written disclosure," which is in the files of a Government defense agency or department and which has a "provable date" prior to a patentee's invention of more than 1 year prior to the filing date of the patent, shall be a complete defense for the Government against a claim for compensation based on the patent. The bill would also provide that this defense shall not apply when the "written disclosure” is based on information received from the patentee. It would further provide that even though the "written disclosure" constitutes a defense for the Government in a suit in the Court of Claims, this "written disclosure" shall not invalidate the patent. Under existing law, such "written disclosure" would not be a defense to a claim against the Government, unless it is contained in a printed publication. Nor would such "written disclosure" be a defense in a suit involving private litigants. A question arises, in connection with the bill under consideration, concerning the scope of the words "written disclosure." For example, a court might give these words such a strict construction as to exclude drawings; and such exclusion would be important since some disclosures of new inventions remain merely in the drawing stage for many months. It is also noted that the measure fails to include, as a defense, devices built and put into secret use by the Government without any "written disclosure." During periods of extensive experimental development, many months may pass after successful first use before a "written disclosure" is prepared. These doubts may be resolved by striking out the word "written" in line 16, page 2 of the bill, so that the amendment would apply to "any disclosure." Subject to the foregoing suggestion, this Department would have no objection to the enactment of the bill. The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely yours, PEYTON FORD, The Assistant to the Attorney General. DEPARTMENT OF JUSTICE, Washington 25, D. C., March 17, 1948. Re: H. R. 3929, Eightieth Congress, first session. House of Representatives, New House Office Building, Washington, D. C. MY DEAR MR. LEWIS: Colonel Gardes of the Department of the Army and Captain Robillard of the Department of the Navy have discussed with me the general nature of their conference with your committee sitting in executive session, March 15, 1948, and in an attempt to meet the thoughts presented we have further revised H. R. 3929, a bill to amend the act of June 25, 1910, as amended. The three of us join in submitting the annexed redraft of the bill and In the remarks herein set forth, except as otherwise noted. The principal changes adopted in the enclosed redraft, from the form of the bill as originally introduced by Mr. Michener on June 20, 1947, are as follows: 1. The type of disclosure to be relied upon by the Government in litigation seeking compensation for alleged patent infringement has been modified by amending lines 15 to 17 of the annexed draft specifically to encompass not only writings but also drawings, photographs, physical embodiments and other physical evidence of prior invention upon the part of the Government or those acting by or for it. 2. In view of the expressed fear that the Government might avail itself in this connection of inventive effort secured from nongovernmental sources or as a consequence of transactions not involving governmental contribution, there has been added to the bill in lines 17 and 18 the provision that such research and development work relied upon by the Government must be based upon work "originating with the Government or those in privity with it." Such added language is believed to be unnecessary in view of the provision, page 3, lines 4 to 6, which prohibits the use of such material against the claimant if he be the source thereof. 3. The bill as originally filed provided that the defense would be absolute either if the defensive material were in the possession of the Government prior to the invention or discovery upon which the claim was based "or more than 1 year prior to the filing of the application for the patent" of the claimant thereon. The latter provision, with reference to the 1-year prior period, to which the New York Patent Law Association took exception, has been eliminated. 4. Some concern was expressed with regard to the standards of proof which would be required to be met by the Government in asserting this new defense. In my testimony it will be recalled that I stated that the defense would have to be proved by the same statutory requirements presently applicable to proof of prior publication or prior public use under section 48-86 R. S. In order to remove any doubt on this score we have added a provision appearing in lines 6 and 7, page 3, providing that the defense shall be successful "if proved by standards applicable to defenses of prior publications or prior public use." These are words of art upon which there is a large and familiar body of law presently existing. 5. There has also been adopted in the annexed redraft an affirmative proviso appearing in lines 10 to 13, page 3, that the proposed defense be available in any pending litigation except any suit in which the claimant has, as of the effective date of the act, started to present testimony. I am still of the view that the latter limitation is undesirable inasmuch as the court can fully protect a claimant from surprise in any pending litigation but, of course, will yield to the determination of the Congress and your committee on this point. One of the cases discussed with you in executive session, in which the present defense would be a complete bar to the claimant, will no doubt have proceeded to the stage at least of claimant's proofs before this bill could possibly become law and, if the limitation last mentioned is adopted the bill will not aid in that case, with the result that clear, unjust enrichment at the cost of the Public Treasury may follow. 6. Although there was considerable discussion of a specific time to be provided in the bill within which the United States must plead a defense under the proposed amendment, no provision in this respect is included in the annexed draft. As was suggested at the hearings it is believed to be undesirable to present this defense in a different pleading position from other defenses. The court, as you will recognize, is fully equipped to protect a party against surprise and at the same time upon a proper showing permit an amendment of any plea for the purpose of presenting with due notice any matter of newly discovered evidence. It is difficult to see why the present proposed defense should be hampered in pleading or presentation by any statutory limitation not common to litigation generally. Since the hearings, at which the question was raised about the manner in which the Government presented its proofs in the trial of patent cases in the Court of Claims, an informal conference has been held with representatives of the court and it has been agreed that the court will reexamine its rules with a view toward adopting, in so far as may be permitted by existing statutory limitations applicable to such action, the Federal Rules of Civil Procedure. It is expected that in all probability a rule will be adopted whereby, subject to the general right of amendment upon the appearance of newly discovered evidence, all issues in the case will be pleaded on both sides before trial and the trial will go forward in the customary fashion with defendant's proofs immediately following the completion of plaintiff's case. 79397-48-ser. 22-9 7. In addition to the foregoing, the redraft adopts substantially all of the suggestions of the New York Patent Law Association, including a sharper definition of the term "provable date" (see p. 2, lines 21-23), the inclusion of the statutory language of the nature of the teaching of the defense (see p. 3, lines 1-4) and the substitution of the word claimant for patentee in line 6, page 3. Should the committee desire, the annexed redraft of H. R. 3929 and this letter may be made a part of the testimony of the writer. The undersigned and the War and Navy Department representatives above named stand ready to furnish any additional information or assistance that may be requested. The courtesy and consideration exhibited by the committee throughout this matter is deeply appreciated. Yours very truly, ROY C. HACKLEY, Jr., Special Assistant to the Attorney General, Chief, Patent Section. [H. R. 3929, 80th Cong., 1st sess.] A BILL To amend the Act entitled "An Act to provide additional protection for owners of patents of the United States, and for other purposes," approved June 25, 1910, as amended, so as to protect the United States in certain patent suits Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act entitled "An Act to provide additional protection for the owners of patents of the United States, and for other purposes", approved June 25, 1910 (36 Stat. 851), as amended (40 Stat. 705; 35 U. S. C. 68), is hereby further amended to read as follows: "Whenever an invention described in and covered by a patent of the United States shall be used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner's remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture. The Court of Claims shall not entertain a suit or award compensation under the provisions of this Act where the claim for compensation is based on the use or manufacture by or for the United States of any article owned, leased, used by, or in the possession of the United States prior to June 25, 1910. In any such suit the United States may avail itself of any and all defenses, general or special, that might be pleaded by a defendant in an action for infringement, as set forth in Title Sixty of the Revised Statutes, or otherwise; and, in addition, any written description, drawing, photograph, physical embodiment, or other physical evidence of research or development work, originating with the Government or those in privity with it, in the files or custody of the Department of the Army, the Department of the Navy, the Department of the Air Force, or any other Government agency having the national defense as its principal function, having a provable date of receipt by or existence in such agency prior to the date of the invention or discovery claimed in the patent in suit, which description or embodiment of the article, material, or process manufactured or used by or for the Government upon which the suit is based is sufficient to enable any person skilled in the art or science to which it appertains, or with which it is most nearly connected, to make, construct, compound or use the same, unless such description or embodiment consists of information or material obtained directly or indirectly from the claimant, shall, if proved by standards applicable to the defenses of prior publication or prior public use, constitute a complete defense for the Government against such claim for compensation, but shall not invalidate any patent constituting the basis of such claim: Provided, That this defense shall be available in any suit now pending except any suit in which the claimant has started to present testimony before the approval of this Act. The benefits of this Act shall not inure to any patentee who, when he makes such claim, is in the employment or service of the Government of the United States, or the assignee of any such patentee. The Act shall not apply to any device discovered or invented by such employee during the time of his employment or service." PATENT LAW ASSOCIATION OF CHICAGO, LEGISLATIVE COMMITTEE (Report of subcommittee on H. R. 3929, the Michener bill) The Michener bill is concerned with the amending of the act of June 25, 1910 (36 Stat. 85, 35 U. S. C. 68), which act defines and limits the remedies available to the owner of a United States patent which covers an invention "used or manufactured by or for the United States without license of the owner |