of possible epidemics; we may again meet difficult problems in this country in epidemics, and if we do our resistance to those will depend upon the skill and number of organizations and men in medical research and the allied practices.

Mr. DIENNER. You have touched upon an interesting subject, namely, the medical research by scientific or highly scientific research. Could you tell us whether institutions which carry that subject on avail themselves of the patent system?

Dr. BUSH. Some of them do and some of them do not. Medical research today of course covers an enormous field. The impact of the physical sciences upon the biological has been very striking. We have, for example, such a thing as very high voltage machines for producing intense X-rays for cancer treatment, a striking problem in recent years. There are physics laboratories built up principally for the study of atomistics, with which there is a great deal of fascination, but the final product is used directly in the treatment of cancer. So that when we say "medical research" we must include a great deal of research outside of the medical field.

Mr. DIENNER. In medical research and particularly where the product of such research may be dangerous if improperly administered, or habit-forming, or something like that, I understand the patent system is used to control those things. What is your experience?

Dr. BUSH. My experience directly is this. I was chairman of the committee up at Massachusetts Institute of Technology which handled the patent affairs for that institution, and that institution, together with many other nonprofit organizations, does deal with the matter of patents, for several reasons, one of which you have mentioned; the dangerous pharmaceutical coming into public use needs to be controlled for the benefit of the public, to guard the public against its improper use, its improper manufacture, and one very effective way of exercising that control is through the patent system. But there are many other reasons why in my opinion academic institutions do use the patent system.

The CHAIRMAN. Who should exercise that control?

Dr. BUSH. I can recite the way it is done at the Massachusetts Institute of Technology, which I think is an excellent procedure. The committee of the faculty which has the handling of the affair has no authority but simply makes recommendations. If an individual on the staff makes an invention, he is bound to tell the committee of it, and the committee then recommends to him how it should be handled in order to bring it properly into use for the public benefit and in a legitimate and reasonable manner. Their recommendations in the 6 years that I sat in that committee were always followed. The CHAIRMAN. Were always followed?

Dr. BUSH. Were always followed. I know of no case in which a recommendation to a member of the staff was not followed by the individual. The recommendation very often takes this form. They recommend that he assign that patent to an organization which can handle the legal, the business aspects of it. One very effective organization in that field is Research Corporation of New York, which is a nonprofit organization founded for that very purpose, and the individual then makes a contract with Research Corporation whereby Research Corporation takes over the patenting and commercialization

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of the idea, pays the individual a part of the receipts, uses a part of the receipts for its own purposes, and donates in the form of a grant a portion of the receipts to the organization in which the man has his place. In that way, all of the profit, all of the net income except the amount paid to the individual himself becomes utilized for further scientific research, because both of the organizations involved are nonprofit organizations bound to utilize their funds for the benefit of the public. Research Corporation makes grants to scientific institutions, such as Massachusetts Institute of Technology, either in research or in education.

The CHAIRMAN. And who in the Research Corporation has the authority to determine what the public interest is?

Dr. BUSH. The board of directors and the board of trustees of that organization.

The CHAIRMAN. How are they selected?

Dr. BUSH. It is a self-perpetuating organization formed in the same way that the board of trustees of an educational institution is usually formed.

The CHAIRMAN. So that the proper functioning of this board rests, of course, in the last analysis upon the good faith and the intelligence of the members of the board who perpetuate themselves.

Dr. BUSH. That is right, sir, and if we did not have at the Massachusetts Institute of Technology great confidence in their intelligence and integrity in the public interest we would not recommend the individual going with them. They are a distinguished group and have shown great intelligence.

Senator KING. Are they selected from various institutions of learning?

Dr. BUSH. No, sir; they are self-perpetuating; they select their own successors. Research Corporation is a queer organization, in a way. It is founded under the laws of New York but it owns all of its own stock, by reason of a special act of the New York Legislature. I told Mr. Elihu Root that one time, and he told me that perhaps I was dealing with a ghost, that this organization might have disappeared and might not have found it out. It is rather peculiar in its organization. By reason of the fact that it owns all of its own stock and of course is unable to pay a dividend, it becomes a nonprofit organization. It uses its entire income, net income, in accordance with its charter, for grants-in-aid to scientific research.

Mr. PATTERSON. I think the committee has in mind what qualifications are necessary for membership on that board. When a man resigns and a successor is elected, are there any particular qualifications?

Dr. BUSH. I don't know offhand whether there are any particular qualifications laid down or not.

Mr. PATTERSON. Beyond the matter of intelligence and public interest, are there any?

Dr. BUSH. I don't know, sir. There may be in their by-laws, but I don't recall.

Senator KING. By and large would you say that the public has been benefited by the operations and activities of this organization to which you have just referred?

Dr. BUSH. I think it has been benefited very greatly indeed in many ways.

Senator KING. In what respect, briefly?

Dr. BUSH. Well, for one thing Cottrell's precipitation of particles was turned over to that organization for the benefit of the public. He was, at the time of his invention, a Government employee, and while he might legally have used the result of his patent for his own ends, he did not feel that it was proper that he should thus proceed. He hence turned over his patent to Research Corporation, which has built up a considerable business about it, out of which it derives a very considerable income. Those patents have been well developed, well commercialized. The decrease of smoke in our cities, the recovery of industrial wastes, prevention of poisoning in agricultural areas, have been largely improved by reason of Cottrell's work, and the net results and profits that have accrued from that have gone in the form of scientific grants to increase research for public benefit in all sorts of places.

Senator KING. Would you say that organization has, to a very large degree, without any qualifications, the confidence of inventors and of the public generally who are interested in inventions and in technological developments?

Dr. BUSH. It has a very high confidence, indeed, as I know. I am going to confer with the president of the Research Corporation next week with regard to matters handled for the Treasury Department on the subject of narcotics.

The CHAIRMAN. Do these directors have the power to restrain the use of inventions?

Dr. BUSH. Certainly.

The CHAIRMAN. And have they ever exercised that power?
Dr. BUSH. Yes.

The CHAIRMAN. In what respect have they exercised it? Can you give us some examples?

Dr. BUSH. They have restrained the use in the case of the precipitation of particles patents themselves, the Cottrell patents of which I have just spoken, and I think undoubtedly in other instancesI can't recall at the moment, but in that instance they have limited the manufacture of those instruments for precipitation.

The CHAIRMAN. Describing the rule under which your staff at the M. I. T. operates, I understood you to say that each member of the staff is under obligation to contribute to the group whatever discovery or invention he makes.

Dr. BUSH. He is under no legal obligation whatever.

The CHAIRMAN. Oh, no; no legal obligation.

Dr. BUSH. He is bound simply by public opinion, the thinking of his colleagues.

The CHAIRMAN. And if he didn't do that he wouldn't be on the staff at all.

Dr. BUSH. Oh, yes, he would; he would be on the staff indefinitely, but he would not be regarded by the group as one who was playing the game properly. It is the public opinion of his associates that controls.

The CHAIRMAN. Have you had any experience of any instance in which there was a conflict of opinion as to what should be done between the inventor and the group?

Dr. BUSH. No, sir.

Senator KING. Would you say that the activities of this organization and its plan of procedure make for monopolistic control of any industry or of any invention?

Dr. BUSH. No; it is quite the contrary, sir. The policy as adopted by the Massachusetts Institute of Technology recites many things, one of which is that the exclusive license should be used only when it is considered necessary in order to bring the device into use, and that the general policy should be one of general licensing.

Senator KING. And then a large corporation, or a small corporation, for that matter, or individuals who are engaged in industry avail themselves of some of the inventions or discoveries of this organization? Dr. BUSH. Oh, yes. And the general procedure in most cases has been that the Research Corporation license all who are capable of handling the invention properly and reasonably.

The CHAIRMAN. How large a staff does Research Corporation have? Dr. BUSH. I don't really know. They have quite a bit of manufacturing activity of their own and the staff there I don't know. The CHAIRMAN. Could you state approximately?

Dr. BUSH. Approximately in the headquarters office where they are handling the business and contractual affairs, and so forth, I should judge about 30 men.

The CHAIRMAN. Who fixes the salary?

Dr. BUSH. The board of directors.

Mr. DIENNER. Dr. Bush, referring to the production or generation of ideas and introduction of them into industry, particularly in respect to the patent phase (I assume you are familiar with the operation of the Patent Office and the patent system in what we call ex-parte prosecution, from your own experience), do you consider that in that phase of the system there is any bias or unfairness, either to the individual or to the corporation?

Dr. BUSH. In all of my contact with the Patent Office, sir, in 20 years, I have never seen the case in which there was the slightest suspicion of unfairness. The Patent Office, in my opinion, handles the ex-parte procedure in a highly efficient manner and with the greatest fairness, holding the balance of justice. There may be disagreements with its action. Of course, many people may not agree with detail, but I think all comers are handled on the same basis.

Mr. DIENNER. So that we might say that in the application of that phase of the matter, that is in a securing of the patent, the Patent Office would not really feel any distinction as between inventions produced by large corporations through research or otherwise or the lone inventor?

Dr. BUSH. I never in my experience have seen any indication of it.

THE INTERFERENCE PRACTICE

Mr. DIENNER. In regard to the interference practice, which we have briefly discussed yesterday, do you see any advantage of a large corporation over an individual or any class of persons having any particular advantage in connection with this.

Dr. BUSH. In our interference practice at present, which is unduly long and unduly complicated and sometimes unduly expensive, there is of course a distinct advantage to the organization which has large resources as compared to the individual.

Mr. DIENNER. Turning now to the exploitation phase, that isSenator KING (interposing). Before you do that, I suppose there are many instances, however, in which a person in good faith, an individual or a corporation or a group, feels that the applicant for a patent is urging an invention or a discovery which one of the interferers claims to have been invented or discovered by him or by his associates, so that it would be improper to say that there should be no interference because that might deny the opportunity to a person who had a prior discovery from protecting himself and preventing a patent's being issued to some person who is a junior in the discovery of the art.

Dr. BUSH. I think, Senator, most of the interferences are in good faith. There are some that are introduced that are not, but most of them are in good faith; but an interference procedure is certainly necessary because, if the two individuals do make the same invention at nearly the same time, then the Patent Office has to find out which was the first. That is a necessary procedure. I suggest merely following the proposal of the Commissioner yesterday, that the procedure ought to be much simplified and shortened.

Senator KING. But you wouldn't deny the right of a person to file

the interference?

Dr. BUSH. Not at all. I think it is a necessary thing that we find out, in the case of a disagreement, who was the first inventor.

Mr. DIENNER. Senator King, we will come to that phase of the matter a little bit later in connection with some recommendations which the witness has made heretofore.

PATENTS NECESSARY TO ATTRACT CAPITAL TO NEW ENTERPRISE

MR. DIENNER. Referring to the exploitation of patented inventions in industry, can you tell us what the prime necessity for a patent is in the way of attraction of capital? Will you discuss that?

Dr. BUSH. Of course, before most inventions can be put into use, it is necessary to attract capital for their development and their introduction. There are some inventions that would go into use without that procedure, which would be automatically adopted without great cost, but in the case of most inventions, the expenditure of a considerable amount of money is necessary before they can be introduced into industry. The patentee, therefore, if he be an individual, is bound to make arrangements for the expenditure of that money before he can derive any income from his invention, either by licensing a company on a royalty basis or by securing new capital and founding a new company for the exploitation of the device.

Mr. DIENNER. Now, we have heard it said at times that a man will take out a patent in order to avoid having someone else take out a patent; what would be the disadvantage in that?

Dr. BUSH. That has, I think, no sinister aspect, as I understand your question. Of course, when an individual makes an invention, if he does not apply for a patent, he may find that someone else does and be surprised to find that the thing which he invented is now controlled by someone else and that he, himself, is barred from its use. That, incidentally, is one reason why nonprofit organizations find it necessary or desirable to deal with the patent system.