Inc., 376 U.S. 234 (1964), and finally Lear Inc. v. Adkins, 395 U.S. 653 (1969). Thus Painton cannot be dismissed lightly as a freak error not likely of repetition.

But the fact is that none of the areas of intellectual property law were drafted to preempt others.7

The common law gives the right to free and open use of that which (1) is publicly available, and (2) is derived from the public availability. Against that common law affirmative right to use, society has created a number of negative-type rights to preclude others from use, each built upon its own socio-legal foundation, standing in its own right, casting its own shadow of varying scope and term determined by its own socio-legal premises and purposes.

The shadows of the patent right to preclude others, of the copyright right to preclude others, of the trade secret right to preclude others, of the know-how contract right to preclude others, etc., overlap in part but they do not fight one another.

Take away the trade secret right by its owner's publication, and the shadow of the patent right to preclude others may properly remain for its statutory term.

Permit a design patent on, shall we say, the Coke bottle shape, to expire. The trademark right to preclude others from use of that bottle in connection with the sale of soft drinks, may properly remain.

Wrap up the patented concept in a package of applications engineering costing 3 years and $1,000,000 to develop, and the right to royalties acquired by contract for purchase of the know-how and the right of termination of use of that know-how if not paid for, can properly remain irrespective of whether the patent be valid or expired.

7. Again here see Arnold, "A Philosophy on the Protections Afforded by Patent, Trademark and Copyright and Unfair Competition Law", 54 Trademark Reporter 413, attached as an appendix hereto.

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For the patent grants no affirmative right to use; its grant is solely a right to preclude use.

The shadows cast by the various independent rights to preclude others, do not fight one another in social or public policy. Rather, the various rights complement each other.

The only proper fight, if any, is between each exception to the common law affirmative right to use, and the anti-trust law right to compete. That is a subject for another paper that ought to be entitled, "Is Antitrust the One True God? --The sole god before which all other public policy must lie down to die?"

VII. CONCLUSION

It is apparent that the trial Court in Painton indulged a "premature synthesis of sterile generalization, unnourished by the realities of law in action", and unnourished by the legislative processes which on the point of law in issue, are highly preferred to judicial processes as original lawmakers.

The language of the trial court discussed above is now present in our law books and is inherently on a day-by-day basis today frustrating the normal conduct of know-how licensing negotiations.

But I continue to negotiate them, having faith in the ultimate persuasion of what I have developed for you, before both legislative and judicial bodies. I have negotiated two such contracts, each involving seven-digit values, within the last month.

Because the tax law affords capital gains treatment for conveyance of know-how as a capital asset, I have a bias to structure the contract in the form of such a conveyance when feasible.

But I believe that the effects of Painton are more safely avoided if the contract is phrased and structured as a technical services or show-how contract, and/or a continuing R & D contract. Note, however, this approach subjects the income to ordinary income tax.

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The appeal of Painton v. Bourns was scheduled for argument February 8, 1971 before the Second Circuit. Hopefully, the fiasco committed by the District Court will be straightened out.

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LIFE UNDER LEAR

TOM ARNOLD* AND JACK GOLDSTEIN**

The authors, practicing patents attorneys, are appalled by the implications of the holding in Lear v. Adkins that a licensee may challenge in court the validity of his licensor's patent. They are particularly concerned that Lear foreshadows preemption of all know-how licensing by federal patent law. Since the courts uphold only a modest percentage of the patents attacked, the authors believe small and medium-sized companies will simply keep their inventions to themselves or will cease their R & D efforts rather than endure the expense of extended patent litigation.

I. PREFACE

A man's word must not be his bond. Public policy commands that honesty in patent and know-how licenses must be muzzled. Them's fight'n words to men brought up on the Spartan concepts of law west of the Pecos, but without exaggeration that is the law we live under. That is Lear, which creates the problem for the patent attorney of living without contracts worthy of the name.

A paper on Lear could be many diverse papers. It could be a commentary on the evil of unnecessary judicial legislation and on the need for legislative processes when public policy is being conceived out of the ether. A paper on Lear could focus on the malfunction of our judicial system under which a cause of action cannot be finally decided for substantially over a million dollars in litigation expense and cannot be litigated to conclusion in a decade. This paper focuses on Life under Lear.

II. THE FActs and the State Court Decision

Lear's gyroscopes were expensive to make and suffered drift, which was excessive for the high performance requirements of new instrumentation. Adkins was a pretty savvy guy; Lear knew it and employed him. His 1951 employment contract provided:

• Member of the Houston Bar. B.S., 1944, LL.B., 1949, University of Texas. • Member of the Houston Bar. B.S., 1964, Purdue University; J.D., 1968, George Washington University.

1 Lear, Inc. v. Adkins, 395 U.S. 653 (1969).