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Number and summary of exhibits

188. Charts: Patents acquired by purchase by corporations dur-
ing the period of January 1931 to June 1938_.
189. Chart: Estimated unexpired patents owned by corporations,
owning from 1 to 9000 patents each, large, foreign, and
small-subsidiaries not included with parent corporations.
190. Chart: Estimated unexpired patents owned by large, foreign,
and small corporations owning less than 1,000 patents each
191. Chart: Patents issued to large, small, and foreign corpora-
tions for period of Jan. 1, 1931, to June 30, 1938..
192. Organization chart of the U. S. Patent Office...
193. Chart: Procedure in obtaining patents...
194. Chart: Examination procedure of patent application___
195. Patent 2,058,139, diagram on a reading lamp, showing what
Patent Office does and does not allow an inventor to claim.
196. Chart: Indicating the sequence and possible duration of
events relating to an invention from its conception to the
expiration of the patent---

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198. Chart: Patent monopoly permitted under present law, and
as it would be under the proposed 20-year bill..
199. Chart: Patent monopoly on Steimer patent and divisions
showing 44-year interval between filing and expiration of
patent, and as it would be under the proposed 20-year bill.
200. Chart: Patent interferences decided on evidence, for years
1924-33...

202. Chart: Patents in litigation, by sections of country, shown on map of the United States..

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197. Chart: Number of applications pending up to 5 years for years 1932 to 1938.

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201. Chart: Unusual interferences of patents_

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203. Chart: A case history of the litigation on one patent-
204. Chart: Patent litigation for years 1934 to 1938_
205. Chart: Government fees in patent litigation...
205-A. Diagram of manner of buoying vessels, patented 1849 by
Abraham Lincoln___

206. Pamphlet: Report of the Committee of the Science Advisory
Board, on the relation of the patent system to the stimula-
tion of new industries____

207. Photostatic copy of Letters Patent. -

208. Genealogical chart of the Robbins and Lawrence shop..
209. Chart: 1924 to 1938 sales record of Motor Improvements,
Inc., and relation to patent litigation_

210. Tabulation: Number of patents granted by the United States
to residents of large foreign countries, 1930 to 1937 and
supported by similar list of smaller foreign countries. ---
211. Tabulation: Number and proportion of patents granted by
some foreign countries to citizens or residents of the
United States___
212. Tabulation: Comparison of patents granted to residents of
the United States by other countries with patents granted
by the United States to residents of other countries - - -
213. Tabulation: Patents granted by various countries showing
proportion granted to foreigners-

214. List: Parts of an automobile (excluding the body proper)
and automobile equipment....

Unnumbered. Brief bibliography on short-term, minor or petty patents (Gebrauchsmuster)

244. Letter, dated Jan. 24, 1939, from F. B. Jewett, vice president of the American Telephone & Telegraph Co., to Hon. Joseph C. O'Mahoney, chairman, Temporary National Economic Committee, submitting information relative to the long-life vacuum tube. Entered in the record on Feb. 8, 1939.

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INVESTIGATION OF CONCENTRATION OF ECONOMIC POWER

MONDAY, JANUARY 16, 1939

UNITED STATES SENATE,

TEMPORARY NATIONAL ECONOMIC COMMITTEE,

Washington, D. C.

The Temporary National Economic Committee met pursuant to adjournment on Friday, December 16, 1938, at 10:30 a. m. in the Caucus room of the Senate Office Building, Senator Joseph C. O'Mahoney presiding.

Present: Senators O'Mahoney (chairman) and King; Representative Williams; Messrs. Henderson, Ferguson, Lubin, Patterson, Davis, Peoples, and Thorp.

Present also: Senator Homer T. Bone, of Washington, chairman of the Senate Patents Committee; Representative William I. Sirovich, of New York, chairman of the House Patents Committee. Counsel: Justin W. Macklin, First Assistant Commissioner of Patents; Henry Van Arsdale, Assistant Commissioner of Patents; Leslie Frazer, Assistant Commissioner of Patents; John A. Dienner, special counsel for committee; George Ramsey, of New York, assistant to Mr. Dienner; R. F. Whitehead, Solicitor for the Patent Office; and Grattan Kerans, Administrative Assistant to the Commissioner.

The CHAIRMAN. The committee will please come to order. Vice Chairman Sumners is detained by reason of a caucus of some kind in the House of Representatives.

The Chair will recognize Admiral Peoples, representing the Treasury Department upon the committee.

Mr. PEOPLES. Members of the committee. It becomes my sad duty to announce the sudden and untimely death of Mr. Herman Oliphant, who was a member of this committee. He was a man of the highest integrity, of unbounded energy and devotion to duty, and of unrivaled attainments in his chosen field. At the time of his death he played a truly indispensable part in carrying out the work of this Government and his passing causes irreparable loss to this committee and to the Nation.

Perhaps because he rose from humble beginnings he never disassociated himself and his ideas from the common people. Endowed with unusual vision and mental gifts of the very highest order, he devoted himself unstintingly to the public good without thought of personal gain or of the effect of his ceaseless labors upon his physical well-being.

Here is a man of whom it can truly be said that he gave his life in the service of his country.

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It is with a sense of deep personal loss that I speak briefly of Mr. Oliphant's passing, for all those who worked with him had real admiration and real affection for him as a man, and I offer, Mr. Chairman, the following resolution, and move its adoption by the committee:

Be it resolved by the Temporary National Economic Committee in meeting assembled, That the committee has learned with profound sorrow and deep regret of the announcement of the death of Mr. Herman Oliphant, a member of this committee, and that the committee deplores his untimely passing; and be it further Resolved, That the record of these proceedings be prepared and transmitted to the family of our deceased member.

Senator KING. Mr. Chairman, I second the motion.

The CHAIRMAN. You have heard the resolution. The motion is made and seconded that the resolution as presented by Admiral Peoples, alternate of Mr. Oliphant upon this committee, representing the Treasury Department, be adopted. All in favor will indicate by rising.

It is unanimously adopted.

The CHAIRMAN. The Chairman now takes the opportunity of welcoming to membership upon this committee the Honorable Clyde Williams of the House of Representatives from the State of Missouri, who has been appointed by the Speaker of the House of Representatives to take the place made vacant by the resignation of Congressman Eicher, recently appointed to the Securities and Exchange Commission.

Congressman Williams, we are glad to have you with us, and we are sure that your presence is going to help us struggle along with this problem.

Congressman WILLIAMS. Thank you. I am glad to be with you. The CHAIRMAN. The committee has been called this afternoon in pursuance of the decision reached at the last public hearing for the purpose of presenting additional testimony with respect to patents. This hearing is under the direction of the Department of Commerce. The Chair will recognize Secretary Patterson to open the hearing.

EXAMINATION OF THE PATENT LAWS AND OPERATION OF INDUSTRY UNDER THEM

Mr. PATTERSON. Mr. Chairman and members of the committee: From December 5 to December 16, 1938, the Department of Justice presented evidence before this body concerning the patent experience of two major industries. At that time, according to the statement of the Department of Justice, interest was centered upon the question of "the relationship between patent practices and the free and open market which it is the purpose of the antitrust laws to maintain." This earlier hearing was "not concerned with the patent law as such or with the details of its administration." To be sure significant evidence was introduced with regard to certain practices in connection with the administration of the patent law, but this was an incidental byproduct of the basic inquiry.

The discussion of the patent laws is resumed today from a somewhat different angle. We are concerned primarily with such questions as: What is a good patent law; does the present law fulfill its constitutional purpose; and, in the light of our modern business

1 See Hearings, Part II.

structure, do any changes need to be made in its substantive or procedural provisions with a view to its improvement?

The patent system has its basis in the Constitution. The Department of Commerce through the Patent Office is the administrative agency in the Government to which has been delegated responsibility for the proper issuance of patents. Our interest, however, goes far beyond mere matters of procedure. We believe in the importance of invention that the "progress of science and useful arts" is one of, if not the most important dynamic element in our national economic advance. In the long run, new processes and new products offer our greatest hope for progressive rise in the standard of living and for increased opportunities of leisure time. We believe that an effective patent system is an important factor in fostering invention and furthermore in bringing about the partnership of new ideas and speculative capital, which is so necessary to make the discovery bear fruit.

While we thus unhesitatingly accept the basic concept of a patent system, we are greatly concerned with the problem of making it reach its maximum social value. We must prevent, as far as possible, abuses of any kind which may creep into its operation or which may be committed under the guise of the patent right. During recent years we have tried to deal with these situations by improving and strengthening the administrative process. However, we now believe that some of the difficulties can only be met by legislative action.

The basic purpose of the system was declared in the Constitution: To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.

In judging its operation and any proposed changes, these fundamental terms must be kept always in mind.

Our purpose in this hearing is twofold. First, we wish to present to you the experience of the Patent Office, pointing out certain conditions and problems which have directly emerged from its operations. Second, we hope to picture for you certain aspects of the patent system at work. For this purpose we have arranged for several witnesses to appear, typical of successful, independent inventors who have controlled the manufacture of their products, independent inventors who have turned over the results of their invention to other enterprises for exploitation, and inventors who function in research. groups attached to large corporations. We shall present several businessmen who have had significant experience with the patent system, and one or two other witnesses whose general knowledge and experience in this subject should be helpful to the committee.

May I emphasize that this is not a completed report. At certain points it will not even be a rounded or completely balanced presentation of a given problem. We do feel that the evidence to be introduced is pertinent to any consideration of changes in the patent law, some of which will be suggested by the testimony of the Commissioner of patents. Perhaps the committee may feel that certain of the conditions or problems discussed should be subjected to further examination and research. I can assure you that the Department of Commerce stands ready to pursue any problem as far as the committee feels it to be important.

The first witness whom I wish to introduce is Mr. Conway P. Coe, Commissioner of Patents since 1933. Commissioner Coe has a wide range of subject matter which he wishes to cover and I hope that it will be possible for him to present his evidence with a minimum of interruption at this session. I am sure that there will be points in his testimony on which the committee may wish to question him in some detail and that we will arrange for him to return to the stand at a later stage in the hearings for as prolonged a discussion of these matters as the committee may wish.

The CHAIRMAN. Thank you, Mr. Secretary.

The chairman desires at this point to make note of the presence here of the Honorable Homer Bone, senior Senator from the State of Washington, who is the chairman of the Senate Committee upon Patents. We feel very grateful that Senator Bone has seen fit to be present at the hearing this morning.

Mr. Coe, are you ready to present your statement?
Mr. COE. Yes, Mr. Chairman.

The CHAIRMAN. Will you be good enough to take the stand? May I say in advance of your beginning to the members of the committee that I understand Mr. Coe has a rather lengthy survey which he desires to enter if possible without interruption. I think it will be a good rule if this afternoon we refrain from interrupting the statement of the Commissioner by questions until he has concluded his prepared statement. If that is agreeable to the committee, Commissioner Coe may proceed.

STATEMENT OF CONWAY P. COE, COMMISSIONER OF PATENTS

Mr. COE. In the last 5 years of my service as Commissioner of Patents I have devoted myself to a careful study of almost every aspect of our patent system. This I have done not merely for my own information but with the purpose of increasing the usefulness of the system to the American people. In the course of this long and serious study I have utilized every available source of information. I have had correspondence and conferences with many persons familiar with the system; with its critics as well as its champions. I have discussed it with inventors; with representatives of every class of industrial organizations; with little men and magnates of business; with patent lawyers and Federal judges; with officials of different executive departments of the Government, and with Members of Congress. My investigations have extended even beyond our own shores. I have had the benefit of the knowledge, experience, and judgment of the officials of various foreign countries, including those of leading industrial nations such as England, Germany, France, Japan, Italy, Canada, and Belgium. I mention these facts only to indicate that my interest in the nature, operation, and effect of the patent system is neither recent nor casual. Let me not be understood as intimating that nothing more can be added to my knowledge, but rather as recognizing the many and difficult problems involved in any attempt at appraising the value of the patent system to our national economy.

At the beginning of my statement I wish also to make so clear as to prevent misunderstanding, first, that I am not only willing but eager to rid our patent system of any and every abuse identified with it, and, secondly, that I shall welcome the adoption of any effectual remedy.

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