The CHAIRMAN. Which is overtaking the other?

Dr. BUSH. Recently I think the advent of new industries has been so inhibited that it has not performed its proper part in picking up the slack.

The CHAIRMAN. How has it been inhibited?

Dr. BUSH. By lameness, by cumbersomeness in the patent system, particularly in the matter of litigation, and by the general situation in regard to the attraction of new and venturesome capital into new

ventures.

The CHAIRMAN. The litigation system, in your opinion, is such that it restricts development, thereby restricting the opportunity for creating labor, new opportunities for labor?

Dr. BUSH. Yes, sir.

The CHAIRMAN. And you have taken that into consideration in the recommendations which you have made here? Dr. BUSH. Yes, sir.

LACK OF SERIOUS ECONOMIC THREAT IN FOREIGN HELD PATENTS

The CHAIRMAN. Have you any suggestion to make to us with respect to the operation of our patent system upon the inventions of citizens of the United States and the inventions of foreigners?

Dr. BUSH. Of course, under our patent laws any individual who comes with a new idea is entitled to the protection of our patents and similarly American citizens may apply for patents in foreign countries. In my opinion, the American patent system is a far better system than is found elsewhere, far more favorable to the inventor. It has been my own personal experience that it is very seldom worth while for an American citizen to apply largely for foreign patents because primarily of the taxes which soon come to bear as a burden. In that sense, then, the situation as far as foreign citizens applying for patents in this country and Americans applying for patents abroad is not the same. They operate under different systems.

The CHAIRMAN. What I had in mind was whether or not in your judgment foreign inventors or foreign cartels, particularly, could use the American patent system for the purpose of preventing production or employment in this country.

Dr. BUSH. If the American patent system is operating properly for its intended use, for improving the standard of living of the American people, through increasing employment, through giving us new industries, then we don't care who uses it for that purpose. Any individual who uses it properly for that purpose will contribute to our general situation and to the benefit of the public.

The CHAIRMAN. I didn't understand that to be an answer to the question as to whether in your opinion the system as it now exists. can be used by foreigners for the purpose of repressing production here.

Dr. BUSH. Oh, yes; it can.

The CHAIRMAN. Have you any suggestions to make to us with respect to remedying that point, that defect?

Dr. BUSH. I am not sure that it needs to be remedied. I think it would require quite a bit of study to determine whether that is on the whole a damaging situation at the present time.

The CHAIRMAN. Do you want us to draw the inference that you believe it may be beneficial on the whole that development could be suppressed or restrained?

Dr. BUSH. No, but I am not sure that that is sufficiently extensive to compensate for the benefit that is undoubtedly produced by having the foreigners come in here and introduce their ideas into the American patent system, which, of course, results in due time in their release to the public.

The CHAIRMAN. Does your experience enable you to draw any conclusion as to whether or not there are among these large groups which are now developing patents, understandings, and agreements which overrun national lines which include other nations as well as the United States?

Dr. BUSH. Well, I know, as I think is general public knowledge, that there are arrangements by which American companies interchange patents with foreign companies.

The CHAIRMAN. Of course, that wasn't in the contemplation of those who drew the original patent law. Have you any advice to give the committee with respect to recommendations dealing with that phase of the situation?

Dr. BUSH. I have never felt that the American businessman needed any great aid in that regard. I have always felt that he was perfectly able to take care of himself in that sort of situation.

The CHAIRMAN. That buzzer is a roll call and the members of the Senate are being called to respond to a vote. Senator King and I will have to go and I will turn the inquiry over to my good friend of the House of Representatives.

(The vice chairman, Representative Sumners, assumed the chair.) Mr. FRANK. Dr. Bush, there is every indication that you have a splendid scientific mind and I therefore assume that in any subject with which you are dealing you want to be supplied with adequate data. I just want to suggest that if you care to, in preparing the memorandum to which you referred, you can avail yourself of the data that the S. E. C. has on the subject of the cost of registering new issues. I think it may surprise you to learn that the cost, particularly of the smaller issues, while it is larger proportionately than in the case of the larger issues, is by no means the impediment to the saleability of such issues, for we have hundreds of them registered and fully ready to sell and they have not been sold. But that and other related data, if you care to have it, we will put at your disposal. Dr. BUSH. Thank you, Commissioner. I shall be glad to.

Mr. FRANK. May I ask you a question on the subject of your suggestion as to experts? It occurs to me that an interesting analogy might be found in the statute, the O'Mahoney-Chandler Act, that was enacted at the last session of Congress. Under that act the courts may call upon the S. E. C. for advice with respect to reorganizations. Would it be possible that a similar device might be used with respect to patents; for instance, that a group in the Patent Office might be set up, of experts upon whom the courts could call if they desired?

Dr. BUSH. Yes, it seems to me that that would be quite possible. I hoped personally that the matter would be broadened so that the court would be enabled to call upon the best man in the country on a particular field for advice in considering a particular issue.

Mr. FRANK. Would you think, to carry the analogy a little further, that it might be appropriate to allow the Patent Office, or some branch of the Patent Office, to apply to the court in any case where a patent suit was being heard and ask for leave to supply information to the

court?

Dr. BUSH. Properly worked out I think that might be quite helpful. It is not exactly what my committee had in mind in making the recommendation.

The VICE CHAIRMAN. Are there any further questions, gentlemen? Dr. Bush, there are one or two points, and I am constantly having to explain my embarrassment because I haven't been able to be here all the time.

I gather from the statement by the chairman that in your report,' which I unfortunately haven't had the opportunity to examine, that you found similarity between the condition of the individual pioneer and the person who is pioneering in the field of scientific discovery and invention. It occurred to me that the similarity probably would be more striking between the position of the discoverer of a new continent or a new island than it would be between the pioneer in the field of scientific discovery and the individual, in the relatively small number of people who can hope successfully to pioneer in the field of invention.

Dr. BUSH. I would compare the geographical discoverer rather with the scientist who spends his lifetime in discovering new knowledge, new relationships.

The VICE CHAIRMAN. I misunderstood your analogy. I thought from the question of the chairman that you had indicated a sort of broad, democratic opportunity in the field of scientific discovery, comparable to that which is afforded the pioneer who wanted to get an individual home.

Dr. BUSH. Of course, we have to contrast in all our thinking scientific discovery with invention, and the scientific discoverer is not subjected to the stresses of the pioneer in industry who makes and commercializes a patentable invention.

INVENTIONS AND EMPLOYMENT

The VICE CHAIRMAN. If I may, I would like to follow that just a little further and for my own information ask for a little more development.

Whatever that was [referring to buzzer], I wish it wasn't.

I refer to the practical situation, as I view it, that has developed by reason of a large number of unemployed people and the peculiarly distressing situation of the person along about 50 years old who has been released from some employment where he has been trained through his lifetime, and the apparent inability of organized society, or whatever you want to call it, to provide an opportunity for at least a relatively large number of people to find any sort of gainful occupation. I wouldn't myself go so far as to say that there ought to be a cessation for a while of the inducement which the Government is offering for people who invent a machine who will give us some more idle people. I wouldn't like to go that far yet, but as a practical, commonsense proposition, we do recognize that we have so much more rapidly

1 "Exhibit No. 206", appendix, p. 1139.

advanced in one of what ought to be, it seems to me, paralleling lines, where we have accumulated all these millions of people, and I question the common sense of continuing to try to hire somebody to invent a machine that will give us some more idle people by offering them a monopoly of 17 years of right to use.

I have traded all my life in the country, buying mules and yearlings and things, and it doesn't seem to me that is an awfully good trade. I can't figure it out.

Dr. BUSH. You and I, sir, approach this apparently from utterly different points of view.

The VICE CHAIRMAN. You are a scientist, and I am just an ordinary fellow around the country. I mean that.

Dr. BUSH. I am a boy from the country, too, but my own experience in this field has nothing whatever to do with that. One of the principal things that I was concerned with that was founded upon invention and that was dependent entirely upon the patent system for its continuance, succeeded in carrying through this depression with approximately a thousand men. Now, the pioneers in that thing made very little money in it; it hasn't been a money-making venture, but it has provided employment in a new field where men would not have been employed if those inventions had not been made.

The VICE CHAIRMAN. What is that, Doctor, what field?

Dr. BUSH. I am thinking of the Raytheon Manufacturing Co. The VICE CHAIRMAN. What do they make?

Dr. BUSH. They make about a million thermionic tubes a month, radio tubes that go into the sockets of your radio set, and they were early in the field and have a large number of inventions in the general field, vacuum tubes and the like.

The VICE CHAIRMAN. That is the development of the use of radio, isn't it? It is a new field?

Dr. BUSH. Yes; that is a very new field; this was just one unit in it. The VICE CHAIRMAN. I was wondering if you had an illustration of what we may call invention and discovery with reference to some established activity, well, anything.

Dr. BUSH. Well, take control devices, a very old field, a field where much work has been done for two generations.

The VICE PRESIDENT. What field is that?

Dr. BUSH. Controls, thermostatic controls, automatic controls of all sorts. I was associated

The VICE CHAIRMAN (interposing). You mean instead of using the hand brake on a freight car you press a button or something?

Dr. BUSH. Yes; and offhand that looks decidedly like a field where labor would be displaced by making things automatic instead of hand operated. My own experience in that field has been this: I was associated with a group that started with some inventions and formed a little company which has gone on for 15 years and has provided new employment by providing new devices, things that the world had never seen and which are now being manufactured.

The VICE CHAIRMAN. Applying that to the railroads, how many people did you increase by reason of that automatic device, just dealing with that one thing? How many people did you increase in the operation of trains?

Dr. BUSH. This, as far as I know, has never gone into the operation of trains. They have some automatic devices but not this particular type.

The VICE CHAIRMAN. I don't want to pursue it to the point of becoming tedious but isn't it a fact that these automatic appliances with regard to trains, which I have seen operate, did considerably reduce the number of people who were required to stop moving trains? Dr. BUSH. Yes, sir; and if the railroads of this country had had their own great research laboratories, had participated completely in the technical advance, had produced 10 or 15 years ago streamlined trains, light cars, many of the things that we see just over the horizon now, the situation in the railroads would be a much more pleasant one than at the present time. In my opinion the railroads have suffered not from the advent of new devices, not from the advent of inventions, but from the lack of completely successful development technically.

The VICE CHAIRMAN. Well, that is compared with the automobiles and traffic of that sort. It didn't result in many people riding trains that hadn't ridden them before, do you suppose?

Dr. BUSH. Well, every time I have been on a streamlined train it has been crowded.

The VICE CHAIRMAN. Now, do you think those people wouldn't have been going places if they hadn't had a streamlined train?

Dr. BUSH. They might have gone another way.

The VICE CHAIRMAN. That has been bothering me, but nobody agrees with me, so don't be disturbed. I have been trying to figure out whether it is a good thing to keep on increasing the number of unemployed people by increasing patents.

Dr. BUSH. You haven't any doubt what I think about it, have you, sir?

The VICE CHAIRMAN. No, sir. Thank you very much.

PROPOSED SINGLE COURT OF PATENT APPEALS

1

Mr. DAVIS. Mr. Bush, I am very much interested in the proposal with respect to the single court of patent appeals. I should like to ask whether this recommendation made by your committee contemplated that all of the evidence for consideration by the Court of Appeals would be made up in the hearings in the Patent Office, so that the Court of Appeals would in fact be a Court of Appeals and hear the case upon the written record and in the absence of the introduction of any witnesses or additional testimony.

Dr. BUSH. My committee, sir, does not make any recommendation in regard to the distribution of function between the courts of first. instance and the Court of Appeals. The recommendation of my committee was directed to one point only, the creation of a single court of appeals for patent cases rather than to have the appeals go to the several circuit courts.

Mr. DAVIS. Was there any contemplation of your committee to the effect that the entire hearings should be here in Washington, assuming that the court of appeals would sit here, or that you would employ trial examiners, such as do some of our commissions, to go to different sections to receive testimony?

This subject is resumed from p. 902 and is continued on p. 1104, infra.